Change in ICMS brings negative impact to public services, says expert

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Murilo Viana, economist specializing in public accounts, in an interview with CNN stated that the measures that cause a change in ICMS, generate an impact of hundreds of millions of reais in the collection of states and municipalities, which “has a negative impact on public services”.

Within the federal system, states need to allocate 12% of the amount collected to health and 25% to education. “When revenue declines, the [valor] linked to [esses] resources decrease”.

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Thus, Viana says that a portion of the poorest population that demand public service may not be assisted.

The economist also declared that the “idea that the government has a ‘full pocket’ is a half-truth”, since in the last two years, the collection “surprised” both at the federal and state levels, partly due to the inflationary level and the rise in commodities, particularly oil.

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However, he says that the price cycle fluctuates and, if inflation at a given moment helps in the collection, then it presses contractual readjustments, “giving a rebound effect”.

“Higher inflation impacts interest rates, which affects the growth rate [do país]and cools the collection”.

Source: CNN Brasil

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