Reforms in 2020 everything you need to know
Reforms in 2020 will continue in Brazil, and administrative and tax reforms are expected to begin progress in Congress this February.
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The government has already signaled that these two reforms should come out this year. Jair Bolsonaro says he is "on the verge" of sending a proposal that cuts the rights of new public servants.
Tax reform will be discussed jointly by a group of 20 deputies and 20 senators.
Read on to learn all about the 2020 reforms in Brazil.
What will reforms in Brazil be like in 2020?
First, it is worth highlighting that the Federal Government will devote all its attention to administrative and tax reforms.
The objective is to continue adjusting public accounts, introducing new tax rules and reducing the cost of public administration employees.
For President Jair Bolsonaro, these two reforms are priorities, stating that “the administrative reform would be the least difficult to approve.”
The Government's aim is to reduce the disharmony between the salaries of employees in private companies.
A survey conducted by the World Bank shows that federal employees earn on average 67% more than employees performing the same function in the private sector.
This proposal will be submitted early this year, containing rules for dismissing underperforming employees. However, it's not yet clear whether this regulation will apply to existing employees or only to future employees.
On the other hand, tax reform promises to unify federal taxes and simplify collection methods. This will bring more people into the formal sector and increase tax collection.
Davi Acolumbre and Rodrigo Maia, president of the Senate and the Chamber, respectively, reported an agreement between the Houses and the Government to present a single tax reform proposal, after a meeting with Paulo Guedes (Minister of Economy).
Given this situation, the agreement was confirmed after divergent proposals began to progress in the House. Indeed, a joint committee was formed to formulate a consensus text that meets the Federal Government's objectives.
The Federal Government pact
In short, the administrative and tax reform will result in several exhausting debates in Congress and for this reason the government has decided to present these texts at an opportune time, scheduled for February.
Reporting that, at the end of 2019, the President of the Republic Jair Bolsonaro sent to the Senate 3 projects that are part of the adjustments to public accounts:
- PEC Mais Brasil: the proposal contained in this PEC is the reorganization of the Brazilian state that foresees changes in mandatory expenses, which may even eliminate municipalities with less than 5 thousand inhabitants.
- Fiscal Emergency PEC: the objective is to reduce public spending in cases of financial crisis.
- PEC of funds: this latest proposal promises to review 281 public funds.
Finally, Paulo Guedes says that R$$400 to R$$500 billion could be transferred to states and municipalities over the next 15 years;
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