The government (Republicans) designs increasing spending on tax benefits next year, contrary to the promise of cuts it has made to reduce these expenses.
Data from LDO (Budgetary Guidelines Law), sent to Alesp (Legislative Assembly), point out that the state should give up R $ 78.5 billion in taxes in 2026. Until last year, the estimate of the Secretariat of Finance for the same year was $ 70.7 billion.
LDO also projects a 0.5% reduction in total state revenues by 2026, although it foresees increased tax collection, and a lower decrease of 0.3% in total expenses.
In 2024, with the São Paulo program in the right direction, the Tarcisio government announced that the 263 tax benefits would be reviewed, with the objective of cutting 15% of spending and waiver.
The program is one of the management showcases. Tax benefits are exemptions, reductions of rates or ICMs credits that favor specific sectors of the economy. Although he claims that he will try reelection, Tarcisio is quoted to run for presidency.
In events focused on the financial market, the governor has presented the program as a counterpoint to the Government (PT), which faces difficulties to maintain fiscal balance.
“We played in a fundamental, superdifical theme, which is the revision of tax benefits. Many no longer made sense, needed to be extinct or redesigned,” said the governor, in an event promoted by Banco Safra, earlier this month.
“We managed to extinguish a third of the benefits the state granted. This represents a 15% reduction in tax spending. It was necessary, because there were very old, obsolete incentives, which no longer guaranteed competitiveness to the beneficiary sectors,” he said.
Although the measure was praised by the financial market, at the end of last year the plan faced criticism from the sectors who lost tax discounts.
The was rehearsed by sectors such as bars and restaurants, whose ICMs rate would virtually triple (from 3.2% to 12%). Faced with resistance, the government agreed to negotiate and, at the end, of the 263 revised benefits, 179 ended, with no change, in decrees published during the year -end recess.
According to the government, benefits were extended to basic items such as rice, beans, manioc flour, fresh fruits, vegetables, coffee, sugar, butter, breads, cookies, pasta and low cost medicines.
In the list of cut benefits, the government lists the trade of purebred horses, rubber tree seedlings, sand and crushed stone, oysters and vieiras, among others.
For the taxpayer Gabriel Quintanilha, guest professor at FGV Law Rio, the extension of part of the benefits reduced the impact of the measure. “Canceled incentives have a small impact, while renewed concentrate greater financial volume,” he says.
He compares the case of extinct purebred horses with those kept, such as those facing the subway materials. “Of course the subway needs incentive,” he says. “But the volume of transactions in this sector is much higher.”
The teacher points out that the process should be more transparent, with greater participation of society in choosing the sectors that should benefit, since exemptions represent taxes that are no longer collected and could be applied in essential areas. “Tax benefits only exist where taxation is excessive.”
LDO brings the benefits separated by sectors, not by products. There are technical caveats to compare data from different years, as values are based on estimates and each year the prospects for economic growth, collection and inflation vary.
Even so, São Paulo tax auditors heard by the report highlight that the comparison gives evidence about the effective scope of the measure.
In the case of the agricultural sector, the previous estimate was a resignation of R $ 403 million. The current one is $ 1.1 billion (182%increase). In the automotive trade and repair sectors, which account for more than half of the São Paulo tax waiver, the comparison between expectations grew 44%, jumping from $ 29.2 billion to $ 42 billion – a difference of $ 13 billion, the equivalent of six times the value reserved for investments in education this year.
In the opposite direction, the waivers that fell most were in administrative activities (42%), financial activities (52%) and information and communication (96%). The fall, however, is compensated by the sectors where there was an increase.
Commenting on the review, the Secretariat of Finance and Planning stated in a statement that “none of the renewed benefits was increased.” That is, there was no increase in exemption percentages.
Regarding the prediction of growth of benefits in LDO, the secretary defended the effectiveness of the measure and presented other calculations, with a projection that, without them, the tax waiver in 2026 would rise to $ 88 billion – not in any previous document.
The estimate considers collection and renunciation data observed throughout the year, after the preparation of the LDO. According to the secretary, the program will make exemptions equivalent to 30% of the collection. Last year they represented 34%.
“If I had not made the movement in December 2024, with the revision of the benefits and the non -renewal of 80 of them, I would have to maintain that universe [anterior de despesas]”Said the executive secretary of Finance and Planning, Rogério Campos, when presenting the new value.
The argument, however, is criticized by opposition parliamentarians to the government analyzing the LDO. “The numbers are clear: the renunciations increased more than the tax revenue from one year to the next. If there was a review, it was ineffective,” said Deputy Paulo Fiorilo (PT).
