The federal government’s decrease in relation to the extent that the IOF Tax (IOF) was increased for investment funds abroad, weakened the position of the Ministry of Finance, according to Fabio Graner, chief analyst of Jota, in an interview with WW this Friday (23)
According to Graner, the government’s surrounding need was a determining factor for the initial decision to expand the taxation, which was eventually reversed after a strong negative reaction from the financial market.
Lack of transparency and prior discussion
The analyst pointed out that there was a lack of transparency and prior discussion on the subject, even within the government itself. “This theme, for example, from IOF on investment funds, shipment of investment funds has not been clarified, was not previously discussed,” said Graner.
He stressed that, at previous times, when this measure was considered, there was a more careful assessment of the possible negative effects, which did not happen this time.
Search for fiscal balance
The decision to increase the IOF was related to the government’s need to close public accounts. Graner noted that the Bimonthly Revenue and Expense Assessment Report was the most realistic since the beginning of the current management, removing projections of collection that were considered unlikely.
“They took a series of revenue that they forced a little there, the collection with negotiations in the scope of Carf, that administrative court, tax transactions within the revenue, all this was not generating any revenue and they kept high volumes,” he explained.
Political and economic impact
The retreat to the extent, although necessary due to the strong negative reaction, caused political wear to the Ministry of Finance. Graner argued that the victory obtained by convincing the president to make a $ 31 billion spending cut was overshadowed by this episode.
“He played this effort, this great political victory he would have and could help a lot in this effort to improve the climate in the economy, value the real one before the dollar, to help with the effort to overthrow inflation,” concluded the analyst, highlighting the negative impact of this “bad step” of the ministry in conducting economic policy.
