São Paulo bets in own revenue to invest US$ 47.1 billion
Valor Econômico
The Government of São Paulo, headed by Geraldo Alckmin (PSDB - Brazilian Social Democracy Party), plans to keep the strong pace of investments that marked the prior management. In the next four years, the forecast is for R$ 80 billion (US$ 47.1 billion) that will be supported primarily by the very collection of taxes, mainly of the Goods and Services Tax (ICMS), and by the increase of the borrowing capacity. In an interview to Valor, the Secretary of Finance, Andrea Calabi, stresses out the average of investments planned until the end of the term of office went from US$ 2 billion a year in the last two decades to more than US$ 8 billion a year in the last administration.
To make the plans feasible, the Governor should keep the tax replacement policy that generated controversies among businessmen and State Treasury in the previous administration, of José Serra (also a PSDB politician). The Secretary also promises to be more severe with the use of tax incentives granted by other States. He says he will increase the inspection and there will have "zero tolerance" with illegal benefits. Calabi resumes the proposal of his predecessor in the Treasury, Mauro Ricardo Costa, of investing 4% of the Interstate rate of ICMS as a means to soften the tax war, with the remainder of the tax staying with the State of destination of the goods. Unlike Costa, the current Secretary admits the possibility of the State losing revenues and recovering the collection with the economic growth of the country.
Except for the wrapping up of the sale of Cesp (São Paulo State Electricity Company), which was not concluded in the previous administration, Calabi clarifies there are few assets available to generate extraordinary revenues. In the lack of it, the Government bets on possible new sources of resources. Since the beginning of the year, the Secretariat of Finance is preparing a bill to allow inspection on the payment of royalties on the exploration of oil. The project must be submitted to the State Legislature in the next three months. Another proposal studied by the Government is the levying of the betterment tax, a tax laid down in the Federal Constitution, but practically unexplored by States and Municipalities. The idea is to establish the collection on the benefits brought by the public works of infrastructure aimed at meeting the demand of the 2014 FIFA World Cup.