Government forecasts budget with surplus for the first time in ten years

The proposal for the 2023 budget predicts that the government will be able to close the year with the accounts in the black for the first time in ten years. The document projects a “small surplus”, according to two sources heard by the CNN and who have direct knowledge of the subject.

Since 2013, the country has not registered a positive result, that is, it ends the year with revenues greater than its expenses.

The budget piece is being finalized by the Ministry of Economy. But the main goals have already been agreed between Paulo Guedes’ team and Palácio do Planalto. The government has until August 31 to send it to Congress.

According to the CNN , the amount reserved for the readjustment to civil service next year is also being defined: around R$ 10 billion. The government does not intend to define exactly how the money will be used – whether for a linear readjustment to all servers or for the restructuring of specific careers.

A presidential aide explains that the idea is to give the servers a more significant increase if the situation allows. For this, the government could use the method of splitting the readjustment, for example.

The 2023 budget also provides for Auxílio Brasil at R$ 400 per month and does not include an increase in the exemption range of the income tax table, according to these sources.

The proposal also maintains the forecast of cutting federal taxes on fuels. So that the document does not clash with Jair Bolsonaro’s campaign promise to keep the benefit at the current level, the R$ 600 Aid is expected to appear as a government commitment in the presidential message to Congress. The same expedient is also the one planned to be used in the case of the revision of the Income Tax table.

as showed the CNN , despite Bolsonaro’s statements, the economic team did not see how to fit the measures into the budget piece. To increase Auxílio Brasil from R$400 to R$600, around R$55 billion more is needed. There is no space within the spending ceiling for this, according to members of the Economy.

The plan of Paulo Guedes’ team is to link both the increase in Auxílio and the expansion of the number of those exempt from income tax to the tax reform. Therefore, it was agreed with Palácio do Planalto that both actions must be expressed in the text as a compromise, but there is no provision for them to be included in the budget proposal itself.

The text provides, however, two important nods to the president. The first is the maintenance of the cut in fuel taxes. Like the increase in Auxílio Brasil, the measure is only valid until the end of this year. Another forecast is to give a readjustment to officialdom.