The booklet provides a detailed comparison, using illustrations, of how much the government has been spending in areas such as health, security, and education over the past few years, plus the costs on public debt.

Information on some of the topics of the booklet will be published on the TCU Portal in a simplified manner, giving even more visibility to subjects that are of interest to everyone.

TCU warns about the lack of transparency in granting tax benefits

In 2018, the projected benefits granted totaled R$ 314.2 billion, corresponding to 25.6% of net primary revenue and 4.6% of the GDP. There were R$ 292.8 billion in tax benefits and R $ 21.4 billion in financial and credit benefits. Of this total, R$ 62 billion are the result of waivers of social security contributions. The volume of tax incentives granted in Brazil is higher than what is spent on Health, Safety, and Education together.

The head of the Department of Government Macro Analysis (SEMAG), Leonardo Albernaz, states that very high values cease to enter the coffers of the Federal Government every year and that they should not be ignored, especially in times of crisis. He believes that this type of concession should be linked to some kind of counterpart that has proven to benefit society. However, that is not what happens.

According to Albernaz, 85% of waivers granted have no expiration date. In general, waivers do not undergo systematic evaluations that justify maintaining or terminating the benefits. Tax waiver is a less transparent expense, which once instituted tends to remain. It's a kind of “eternal” concession made with public money.

One of the Court's main criticisms of this type of tax benefit is the lack of evaluation and studies that prove the cost-benefit of this type of incentive for Brazil, as well as the lack of technical criteria in the concession process. The legal nature itself of tax incentive concessions makes public transparency difficult, as it can be instituted either by law or by decrees or provisional orders.

Despite being granted by legal instruments, TCU found that part of the concessions of recent years were in disagreement with the Fiscal Responsibility Law (LRF).– This  led TCU to record irregularities, warnings, and recommendations related to non-compliance with the requirements for waiver of revenue in its Prior Opinion on the Accounts of the Presidents of the Republic of recent years.

Albernaz emphasizes that the Court argues that all concessions of public money should have a level of transparency similar to that of government spending on direct expenditures, which are submitted annually to the National Congress in the process of approving the Annual Budget Law (LOA). “In LOA, Federal Government spending goes through a fierce dispute over public resources. In it, there is funds citation, settlement, payment ... In the waiver, this annual discussion is hindered. There is also the issue of tax secrecy, because only the Department of Federal Revenue of Brazil has access to data regarding waivers.”  

The systematic granting of tax incentives, according to him, may be contributing to aggravate the current economic situation in the country, since the funds raised are not enough to cover current expenses in Brazil, which puts the country in a vicious circle of indebtedness. "The truth is that these resources are missed and even have an impact on the fiscal imbalance of states and municipalities, which have faced recurrent deficits, also caused by excessive tax waivers.”

Click here to access the publication "Tax Facts" in Portuguese.