Mansueto rules out tax increases amid crisis

The Secretary of the National Treasury, Mansueto Almeida, ruled out on Friday any attempt, at the time, of discussion around the increase in the tax burden in the country, despite the deterioration of public accounts with the expansion of spending to combat the effects of the coronavirus pandemic. "This is no time to discuss tax increases, increased tax burdens, let alone a financial transaction tax. So that's out of the question," Mansueto said in an interview with CNN Brazil. According to him, given the current situation, with the government postponing tax collection dates, the priority is to combat the economic and social effects of the spread of coronavirus, while the gradual recovery of the economy needs to be done "very carefully" and based on health data. In opposed to the idea of re-raising taxes to compensate for the fiscal situation, the Treasury Secretary reiterated the importance of the structural reform agenda past the pandemic crisis. "As we will pay this (tax) bill, we have to discuss it later. Even if we make the reforms and the country grows faster, (this) will help pay that bill," he added. According to data released by the Central Bank on Friday, Brazil's gross debt jumped to 79.7% of Gross Domestic Product (GDP) in April, a record, in the wake of the strong primary deficit recorded by the consolidated public sector of 94.303 billion reais in April – also a record since the beginning of the series in 2001. Mansueto also said that a gdp contraction of between 9% and 11% in the second quarter -- estimated by the market , is consistent with a decline in the economy of between 6% and 7% this year. "More or less everyone in the market is converging towards a drop, in the second quarter, between 9% and 11%. So a drop around that... is compatible with the fall in GDP for the year by between 6%, 7%," he said. He recalled that the official estimate of the Ministry of Economy for the performance of the economy in 2020 is a 4.7% decline. On first-quarter GDP data released this morning, Mansueto highlighted losses in the service sector, which accounts for 74% of the economy. "Only the second half of March, when we had already started this process of social distancing, had a very strong impact (on the GDP result in the quarter)," he said. Brazil's Gross Domestic Product (GDP) contracted 1.5% in the first quarter of this year over the previous three months, the Brazilian Institute of Geography and Statistics (IBGE) said on Friday, in the strongest decline since 2015, following the first signs of the impacts of restrictions because of measures to contain the spread of coronavirus.