In an interview with Power360, the executive president of the association that brings together publicly traded companies, Pablo Cesário, says that the government as a whole must pursue fiscal balance
The executive president of the (Brazilian Association of Open Companies), evaluates that the discussion about fiscal adjustment should be less about spending and more about the quality of public money use. He says that Congress should take responsibility for the issue, as it has decisive about 1/4 of the discretionary budget, the equivalent of about $ 50 billion.
“The central question is, if Congress is receiving more budget responsibilities, it must also be more power to decide on the budget. It should take responsibility to say ‘this expense is bad or well done’, and have the ability to choose, for those being poorly made, the cuts that need to be done. Therefore, it is not a matter of reducing spending,” said in an interview with Poder360.
Watch the full interview, which was recorded on June 16, 2025 at the Power360 studio in Brasilia:
Cesario says the time is not to increase taxes while “All the reais in the hand of the state is not being well used”.
In recent weeks, the government and Congress have diverged over the proposals presented by the minister (farm) of tax increases. The economic team issued a decree to raise the IOF (Tax on Financial Operations) and a provisional measure that creates a 5% rate on currently exempt titles, such as the LCIs (real estate credit letters) and the LCAs (agribusiness letters of credit), and increases the taxation of applications and BETs.
“I usually use the next metaphor: ‘It’s no use filling the water tank while the taps are open'” says the executive president of the Brazilian Association of Open Companies.
The executive states that the Lula government understood that it is necessary to find a fiscal balance, but says that this work cannot only be from the Ministry of Finance, but from all other sectors of the Federal Administration. “To say this also means that the only tool that is available is the increase in recipes,” declares.
For Pablo Cesário, the way for Congress to make a more robust analysis of public policies implemented by the federal government is to have their own study centers. Cites as an example IFI (Independent Fiscal Institution). The organ is linked to the Senate. It was created in 2016 to help in the transparency of public accounts.
He cites as an example the moment of full employment in the country and, at the same time, the unemployment insurance records. “There is an wrong incentive. The person works, resignation, begins to receive unemployment insurance and takes an informal job. I understand that each of the people, individually, is increasing the ruler. But, from the country’s point of view, it is not possible to be so. Congress could change the rule,” it says.
For the executive, the current budget system is bad, lives from “Fantasies” and must be “Deeply redone.”
“Because that’s where the real policy is. Politics is in deciding what priority is and people have to make choices about what is most important.”declares.
Cesario also criticizes the idea of a linear cut of tax benefits. The Executive Secretary of Finance, Dario Durigan, signaled on Wednesday (18.Jun.2025) who should present to the summit of Congress, next week, a proposal to review tax benefits, with the possibility of a cut of 10%. The Manaus Free Zone, the Income Tax deductions and a part of the simple would be left out. The statement was made in an interview with the newspaper The globe.
“A linear cut will receive many judicial questions. And he makes the same mistake of cutting good and bad things indiscriminately. Although he can solve the short -term problem, he does not solve the structural problem,” says the executive president.
He also declares not to see a positive scenario for new IPOS (acronym for public offering) in Brazil. “We will have this bad scenario, challenging, while this interest rate remains 14.75%, 15%, with more IOF. We have an economic, monetary, consideration policy that will last until we can solve the very serious fiscal problem, of sustainability of our debt.”says.
