2023-08-24 00:20:15
© Reuters.
A study on the Program for Modernization of Tax Administration and Management of Basic Social Sectors (PMAT), of the National Bank for Economic and Social Development (BNDES), reveals positive impacts on tax collection of Brazilian municipalities, as well as in terms of social investments, especially in the areas of education and health.
The research, released in the fourth edition of the BNDES Studies series, refers to the period from 2003 to 2021 and took into account variables such as municipal revenues and expenses, fiscal situation and municipal Gross Domestic Product (GDP), crossing data from the bank itself, from the Treasury National Institute and the Brazilian Institute of Geography and Statistics (IBGE).
Created by the bank in 1997, PMAT aims to promote greater fiscal efficiency in municipalities, also supporting cities in financing local expenses and investments. From 1998 to 2021, the program registers approximately R$ 4.92 billion in financing granted, corresponding to 574 operations that benefited 420 Brazilian municipalities. In the period analyzed in the study (2003 to 2021), 363 cities were benefited, with contracted values of R$ 3.69 billion, in 458 operations.
The PMAT is considered one of the BNDES’ main instruments to support municipalities. The main objective of the program is to increase the tax collection of the municipalities, carrying out actions that make this collection more efficient. “In general, we find positive effects in tax collection, in investments resulting from greater collection. We see positive effects on health and education expenses and we also see effects on the growth of municipalities when we look at municipal GDP data”, Luciano Machado, BNDES Impact Assessment manager, told Agência Brasil.
Collection
Among the results found, the highlight is the growth of 14.5% in the general collection of taxes in the municipalities surveyed, with increases of 12.6% in the case of the Urban Property Tax (IPTU), 17.4% in the Tax on Services (ISS) and 19% on the Property Transfer Tax (ITBI). Equity revenues expanded by 39.2%.
In the case of expenses, there was an increase in investments in social infrastructure in the beneficiary municipalities. the expense per capita, that is, per person, with education increased by 22.9%, while per capita expenditure on health increased by 33.6%. The study shows that even with the growth of total budgetary expenditures, there was no deterioration in the fiscal situation. “We observed that expenses with education and health grew after the support from the BNDES”. This is a positive and growing trend, commented Luciano Machado. He also signaled that the study confirms that the increase in revenue was accompanied by investments for the well-being of the population, notably in education and health, thanks to the support of the PMAT. In cities with the lowest Municipal Human Development Index (HDIM), expenditure per person on education evolved more (27.6%).
Economist Ricardo Agostini Martini, from the BNDES Impact Assessment Management, pointed out that although the overall result was positive, “we saw greater intensity of results in the Northeast Region, because it brings together the most needy municipalities, which have more potential to grow ”. In the Northeast, 42% growth in investments in education and 39% in health were observed. “In education, the Northeast really boomed”, said Martini. In the area of health, the result was more or less balanced between Brazilian regions.
GDP
The effect of PMAT was 17.6% average increase in GDP per capita municipal. In cities with low HDI, the positive impact of PMAT was evidenced by around 29% GDP growth per capita. Luciano Machado stated that the data “are rich enough for us to see when there is an increase in tax effects, which taxes contributed most to this increase. What can be seen is that the effects on municipal administration taxes varied positively, considering the actions financed by the PMAT”. By region, the Midwest concentrated the highest increase in GDP per capita, around 24%.
The work also indicates that increasing the territorial coverage of the program, expanding the number of beneficiary municipalities, can be a way to reduce intermunicipal and regional inequalities.
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