12/12/2008 11h07
US$ 3.6 billion renunciation seeks to stimulate consumption
Valor Econômico - 12/12/2008
In order to guarantee a 4% growth in 2009, objective undertaken as a goal by the government, it announced yesterday three steps to stimulate consumption and one to relieve the domestic credit market. "These will not be the last measures" and "we will do whatever it takes", were the guarantees given by the Minister of Finance Guido Mantega, to the 29 businesspeople who had a meeting with President Luiz Inácio Lula da Silva, and, later, in the interviews to the press. He even signaled with the possibility of making the labor market rules more flexible - an old demand of the private sector, recalled in the meeting with Lula. Mantega mentioned the reduction of the working hours as an example of what could be decided. With the new Withholding Income Tax rates, whose values will be zero, 7.5%, 15%, 22.5% and 27.5%, the government will leave in the hands of the workers R$ 4.9 billion (US$ 2.1 billion) of a tax renunciation package of R$ 8.4 billion (US$ 3.6 billion) for 2009. With a 50% reduction of the IPI (excise tax) on the automobiles (for engines of 1.0 up to 2.0), the reduction of the IOF (Financial Operation Tax) for the credit to the consumer from 3.38% to 1.88% a year and the offer of a credit line for companies with debts that became due between September, 2008 and December, 2009, the government expects to contribute with, at least, 0.3% of the next year's GDP . It is admitted that there may be a recession, understood as two consecutive quarters of negative GDP compared to the immediately preceding quarters. That may occur between the last quarter of this year - with a fall of 1% - and the first quarter of the next. From then on, the GDP would stabilize and growth would be resumed in the second half of the year. The entrepreneurs were asked not to lay off their employees, because the government will work to sustain the level of activity - which does not imply any commitment, but an effort of the private sector.
