Letter from the Governors defends tax reform and debt review

Support for tax reform, revision of the states’ debt and expansion of the debate within the scope of the Federative Pact are the central themes of the Governors’ Letter, presented this Saturday (4th) by the governors who form the South and Southeast Integration Consortium (Cosud). The document marked the closing of the 7th meeting of the event, held at the Getulio Vargas Foundation (FGV), in Botafogo, in the south zone of Rio de Janeiro.

The letter manifests the commitment of the Cosud states to work together with the federal and municipal governments in approving a tax reform that increases economic efficiency and guarantees social justice and the preservation of the autonomy of governments to carry out policies to promote local development . One of the changes under discussion is the change in ICMS taxation from origin to destination.

Public debt

According to the governors, the debt of the South and Southeast with the Union reaches R$ 630 billion, which corresponds to 93% of the debt of all Federation units with the federal government. The letter proposes a renegotiation of the debt correction criteria, which has been updated by the Extended National Consumer Price Index (IPCA) plus 4% or the Selic Rate, whichever is lower.

“It is unthinkable that, in an environment where economic growth is much lower than the burden of debt contracts with the Union, states pay their debts and still invest in infrastructure, modernization and maintenance of essential public services. It is necessary that these contracts pass through. to have their charges compatible with the behavior of the national economy”, says an excerpt from the letter.

“The states of the South and Southeast account for 80% of federal tax collection. The more we organize the financial life of these states, the more we will develop and the more federal taxes will be generated. When Brazil receives more, all states benefit from through participation funds,” said the governor of Rio, Cláudio Castro.

Federative Pact

In the document, the states ask that acts that represent an increase in expenses not be implemented without prior discussion. “Obligations cannot be imposed on the states without due compensation, especially financial ones. When that happens, the population ends up paying the bill”, said the governor of Rio Grande do Sul, Eduardo Leite.

Cosud members highlighted the importance of strengthening regulatory agencies to regulate and supervise public service concessions.

The next Cosud meeting is scheduled for June, in Minas Gerais.