Source: O Estado de S.Paulo

Once again proving the mismatch between the real economy and public finances, last year, when economic activity registered a notable deceleration in relation to 2010, federal revenue reached its greatest real growth in the last four years. The total amount of taxes and contributions paid to federal coffers in 2011 was R $ 969,9 billion, 10,1% more than the amount collected in 2010, after discounting inflation.

Until a few months ago, the IRS estimated that the collection in 2011 could be 11% to 11,5% higher than the previous year. The result was less than expected, but even so, "the collection did not frustrate," said the secretary of the Federal Revenue, Carlos Alberto Barreto. This increase is more than three times the most recent estimates for GDP growth in 2011, of a maximum of 3%. This means that, as has been happening for a long time, the federal tax burden has grown again.

Due to distortions in the Brazilian tax structure, the performance of federal tax collection in recent years has invariably been better than that of the economy. When economic activity is going well, the collection goes even better. When production grows at a slower pace, the slowdown in revenue is less pronounced. And when GDP declines, as it did in 2009, tax revenue also decreases, but less than production.

Last year, however, that parallelism was broken - in favor of the government, of course. Compared with the performance of the Brazilian economy in 2010, when GDP grew by 7,5%, 2011 was very modest (official GDP data for last year will only be known in March). But the collection, which in 2010 had increased 9,8% in relation to 2009 (a bad year for the real economy and public revenues), grew even more last year.

It is not surprising, therefore, that the federal government has met the primary surplus target set for 2011. The central government (National Treasury, Central Bank and Social Security) had a primary surplus (savings made for the payment of interest on public debt) of R $ 93,52 billion last year, equivalent to 2,26% of GDP (the target was a surplus of R $ 91,8 billion).

On the revenue side, in addition to the excellent performance of tax collection, the government also relied on the payment of dividends from companies of which it is the majority shareholder. Last year, dividends totaled R $ 19,9 billion.

The fact that the federal government has played its part in meeting the targets - the final results of the entire public sector, including the performance of state-owned companies, states and municipalities, will be released today by the Central Bank - does not mean an improvement in quality fiscal and financial management. Although the government has been spending more and more, as its revenues grow, the government has not been improving essential public services at the same rate as its expenses are growing.

Last year, personnel expenses increased 7,7% while the payment of benefits grew 10,4%. As it did not further reduce the expansion of these and other costing expenses, in order to meet the fiscal target, the government had to contain other expenses, especially investments. Despite the statements by President Dilma Rousseff that the fiscal adjustment would not be made at the expense of the indispensable investments to improve infrastructure and remove the risk of bottlenecks in areas essential for the growth of the economy, in 2011 investments totaled R $ 47,5 billion , only 0,8% more than in 2010.

Unusual revenues, such as those resulting from judicial sentences or those resulting from special programs such as Refis da Crise, helped to improve federal revenue in 2011. If there is no such revenue in equal volume in 2012, federal revenue will not repeat the optimum 2011 result. This will require a more efficient fiscal management from the Dilma government, if it wants to preserve investments, as it has promised.