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Economy Minister Paulo Guedes said on Wednesday that the government-sponsored pension reform project could generate a savings of 700 billion rand to 1.3 trillion rand out of ten Guedes pointed out the scale of social security reform that investors could achieve over the next two years, two-thirds more than the failure of the previous government.
In an interview with Reuters at the World Economic Forum on the Swiss Davos ski resort, Guedes is considered the cornerstone of President Jair Bolsonaro's economic program.
"We are currently studying the figures, which range from R $ 700 to R $ 800 billion, to R $ 1,300 billion, so this is an important reform that has important structural fiscal adjustment," Guedes said.
"This will have a powerful tax effect and will last 15, 20 or 30 years," he said. "That's where we follow (the way to) Greece."
The values quoted by Guedes are the same as those indicated in the proposal of the economist Armínio Fraga.
The new rule coordinated by Tafner unifies the entire current system (INSS, civil servants, teachers and rural staff) and sets a common minimum age for retirement: 65 for men and women after a period of 10 and 30 years old. Age 15
Creates a minimum income for seniors – universal benefit with no contribution limit or income test – equivalent to 70% of the minimum wage, and establishes a system of individual retirement accounts – capitalization – for all newborns from 2014.
Investors have welcomed Bolsonaro's promise to open the Brazilian economy, reduce and simplify taxes and privatize state-owned enterprises. The main Bovespa index reached a new record and the dollar fell after six highs.
The reform proposal of the previous government, by Michel Temer, originally provided for a saving of 800 billion dollars in 10 years before parliamentarians make amendments reducing savings estimated at 480 billion of rand. The proposal was dropped following the scandals that hit the Temer government.
On corporate income tax, Guedes said the government was seeking to reduce the rate from 34% to 15%. This "brutal" reduction would be offset by the taxation of dividends, now exempt, said Guedes. According to him, this change will increase competitiveness.
Guedes also said that the government intended to reduce Brazil's tax burden from 36% to 30% of gross domestic product (GDP). extinguish 50 state-owned companies in the space of three to five months.
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