In one more offensive against the government, the mayor, Hugo Motta, asked the economic team to immediately suspend the incidence of the financial operations tax (IOF) on the draweed risk operations. Motta wants the government to retreat even before the end of the 10 -day period given to the economic team to present alternatives to the increase in tax, which should yield about $ 20 billion to public coffers this year.
The decree that changed the rules of the IOF established that the risk risk is a credit operation, something that was not expressly provided for in the previous legislation. With the change, this operation is taxed in the same way as the other loans requested by companies, whose maximum tax rate went from 1.88% to 3.95% per year.
The risk risk is a transaction in which a retail or industry company anticipates payment to its supplier through an agreement signed with banks. On the day the invoice wins, instead of paying the supplier, who has already received in advance, the company pays the financial institution.
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There are doubts between experts, however, whether the operation can be classified as credit or if it would be a commercial operation. The increase in cost due to the incidence of tax, argue economists and companies, must be passed on to consumer prices.
The change in the risk risk becomes worth, according to the decree, this Sunday. Therefore, the rush in Motta’s request. If the government suspendes taxation on this operation, it would be the second retreat as it changed the IOF rules. Six hours after the original publication, the government had to go back to tax remittances abroad after a strong negative repercussion in the financial market and capital control speculation.
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IOF is a regulatory tax and is therefore prerogative for the Executive to define its tax rates without the need to go through the congress. Given the strong negative repercussion of the changes, however, parliamentarians have already presented 20 projects of Legislative Decree (PDL) to support the effects of the measure.
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This week, Motta gave the government an ultimatum and gave a period of 10 days for the economic team to have more structuring alternatives to continue the fiscal adjustment. Otherwise, he indicated that he will guide the PDLs and that there is a “environment” in the House to be approved.
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The Ministry of Finance, however, sees no other option to close the hole in this year’s budget for now. The economic team argues that the changes aim to correct distortions that cause unfair competition, but admit that the decree has also been designed to help close the 2025 accounts.
The forecast revenue from the decree of about R $ 20 billion, adds to the freezing of R $ 31.3 billion of spending promoted by the government to comply with the fiscal rules. The target of primary result in 2025 is zero, with a deficit tolerance limit of $ 31 billion. The official projection of the government is already on the floor of the goal.
