Nearly 40% of the extra revenue that Brazil’s government needs to erase its budget deficit next year hinges on one strategy: the Brazilian Treasury’s top lawyer using a stronger hand to negotiate some 67 billion reais ($13 billion) from tax disputes.
Anelize Almeida, the Treasury’s attorney general, told Reuters she expects to haul in even more.
Underpinning her confidence is a recent rule change for tax trials that awards the government a victory in the case of a split vote on the federal tax appeal board CARF, where companies and individuals dispute their tax obligations.
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Many private economists view Finance Minister Fernando Haddad’s revenue projections with skepticism, arguing he should trim spending to guarantee the government follows its ambitious new fiscal rules.
But Almeida insisted the outlook for more revenue from tax disputes is conservative, and stressed that in addition to what is already outlined in the 2024 budget, the government is focusing on the 100 largest and most promising tax cases in the courts, with some 180 billion reais at stake.
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“What comes in is profit,” she said, adding that state-run oil firm Petrobras (PETR4.SA), which is involved in four cases totaling around 40 billion reais, has shown itself more willing to negotiate a settlement.
The 100 judicial cases she is prioritizing involve companies that have made a deposit as collateral in their dispute, improving the odds of actual payment.
At CARF, where companies that lose to the government can later appeal to the courts, she said that revenue forecasts reflect just a fraction of what is on the docket. One subset of 1,500 cases represent around 800 billion reais, Almeida said.
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“And 1,500 cases for CARF to adjudicate in a year is highly feasible, highly reasonable,” the Treasury’s attorney general said.
($1 = 5.1863 reais)
Reporting by Marcela Ayres and Bernardo Caram; Editing by Brad Haynes and Rosalba O’Brien
SOURCE: reuters.com