Mr. Henwood
The Brazilian Government signed a recessive program which makes hard courts of expenses and increase of taxes that can be called * IMF's austerity package*.
A cast of measures that includes a hard court of expenses, the drastic reduction of the deficit of the Welfare and the increase of the taxes collection was announced by the Economy Secretary Mr. Pedro Malan for, in three years, to try that the last administrations didn't get at the country: that's to say * the Government will spend inside of the limits than it collects and eliminate the public deficit.*
The foreseen courts will reach the whole public section, including projects of the development program (Brazil in Action) but they will have smaller impact in the social areas.
To increase its revenue, the Government intends to elevate next year the aliquot of CPMF, (contribution pays when a check is issued ) that would arise of the current ones 0,20% for 0,38%, dropping for 0,30% in 2000.
Besides, for the companies, the contribution for Social Welfare Financing (Cofins) it will pass of 2% for 3% and it will also be collected from the Banks.
It will be universal the aliquot of contribution of 11%: now to inactive public servers and civil pensioners don't contribute to National Servers Welfare
What is intended with such a contribution of 11%, it is the warranty of the even partition of the expenses of system costing what represents an annual financial impact in the order among R$ 1,7 billion.
The measure embraces 446.942 public servers.
The adoption of additional temporary aliquot of 9%, incident on the portion of superior remuneration the R$ 1.200,00.
The measure,( valid for five year-old period ), represent annual entrance of resources of the order of R$ 2,7 billion.
The contingent embraced by the proposal is of 488.989 public servers.
Although there is a lot of expectation with the measures, can be verified that there was not a package properly but some prolongation economic measured as happened after the Mexican crisis.
The President Fernando H. Cardoso with the financial help that will come from IMF and reforms approval by National Congress ( he has majority position) will enlarge its cast of measures here call FISCAL ADJUSTMENT.
In spite of Opposition's politicians screams the strongest emotions are still to happen in Brazil.
In case you need a larger study or more details I can send you in private the official document in it integral form. emilio