Proposal to link Bolsa Família to the taxation of dividends generates criticism

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After a year in search of a funding source for the new social program of the president Jair Bolsonaro, the economic team still does not have a solution to the problem. The Economy Minister’s latest bet, Paulo Guedes, for the program generated discomfort in the political wing of the government.

Guedes linked to dividend taxation foreseen in the reform of the Income tax as a source of income for the benefit that will replace Bolsa Família. The main criticism is that this is an uncertain recipe, given the difficulties that the text faces in Congress.

The Minister of Citizenship, João Roma, has been insisting with Guedes’ team on the need to point out a concrete source of revenue, within the proposed Union Budget to be sent to Congress in August.

Rome already has the format of the new program ready and intends to send the project to the Legislature as soon as the parliamentary recess is over, even if it is free of cost.

According to technicians from Cidadania, the alternative proposed by Minister Guedes’ team is risky and may make it difficult to take the new social program, considered a showcase for President Bolsonaro in the 2022 reelection campaign, from the paper. The president himself, according to a close aide, has demanded de Guedes a solution almost daily.

The assessment is that time is getting tighter, with almost five months to go before the end of the year. The electoral law prohibits the launch of social programs in an election year.

Minister Roma’s plan, already confirmed by Bolsonaro, is to approve the project by October so that the new Bolsa Família starts running in November, when the last stage of payment of emergency aid ends.

Bolsonaro wants to raise the average value of the benefit, currently at R$189, to something close to R$300. He also advocates raising the universe of benefited families, from 14.7 million to almost R$17 million. For this, Rome is defending another R$ 18 billion, in addition to the R$ 35 billion foreseen in the current budget of the program, reaching R$ 53 billion.

Rome travels to Tokyo early next week to attend the opening of the Olympic Games. The Special Secretariat for Sports is linked to the folder. He returns in the last week of July, when he intends to have new talks with the economy minister.

However, depending on the economic team, there are no alternatives other than tax reform. According to a source in the ministry, the alternative is to vote on the reform of the IR by the end of August.

Comings and goings

The discussion about the government’s new social program has had several comings and goings since August 2020. The sources of revenue presented by the economic team, such as using resources from the salary bonus and freezing pensions above the minimum wage, were rejected by the president.

The idea of ​​using funds from the precatório (government debts recognized by the Justice) and the Fund for the Maintenance and Development of Basic Education (Fundeb) did not succeed either.

The new program has been ready since November 2020, still under the administration of former minister Onyx Lorenzoni. In addition to readjusting the average value of Bolsa Família, the idea is to bring together under the same umbrella, various programs, such as purchasing food from small farmers, building cisterns, and supporting early childhood.

It also provides cash prizes for children who get good grades at school and excel in sports, intermediation of labor for insertion in the formal labor market, as well as voucher for day care and for orphaned children from Covid. The plan also includes microcredit and a payroll-deductible loan for program beneficiaries.

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