Natalia Ferreira de Carvalho Rodrigues, of the Fundação Getulio Vargas, offers a nuanced evaluation of one of Brazil’s most egregious fiscal policies, the Refis program for tax debt forgiveness, which the federal government has repeatedly used since the turn of the century to try to prop up employment. Bottom line conclusion: although many firms benefitted from the Refis program, only small firms actually met their implicit promise to keep employment levels stable in exchange for benefits. This is yet another example of the Brazilian government’s recurrent inability to demand reciprocity from large beneficiaries of government fiscal concessions. Rodrigues puts numbers to the cost: tax expenditures like Refis accounted for 4.2% of GDP in 2018, more than the entire healthcare budget.
Image: Flickr/CreativeCommons/Carlos Ebert
