FIESP: TAX REFORM IS MORE THAN NECESSARY
In the transition from 2019 to 2020, the Brazilian industry and economy were showing clear signs of reaction, with indications that the gradual recovery would gain strength throughout 2020. This expectation was supported by the environment of low interest, controlled subsidiary, and a real estate sector in full recovery. Unfortunately, this trajectory was interrupted with the arrival of the pandemic.
At the height of the crisis, the IMF predicted a drop of 8% for Brazilian GDP in 2020, while the World Bank spoke of a 9.1% reduction. With the incredible reaction of economic activity, the fall was only 4.1%, much less than expected and that seen in different countries.
In large part, the reaction was due to important actions by the federal government, such as the adoption of credit programs, emergency aid, flexibility in the labor market and postponement of tax collection. With these measures, the country managed to go through the worst moment of the crisis, and we started to recover part of the breath lost at the beginning of last year.
FIESP continues to defend that the measure with the greatest impact on the economy is the approval of a tax reform that simplifies the current system and reduces the bureaucracy and compliance costs of companies. For the 2021 GDP, the projection is for growth of 4%. However, it will be fundamental, this year, to return to budgetary control with respect to the Law on the Ceiling of Expenses.
Source: Eletrolar News Magazine #141
