Federal Government announces R$ 147.3 billion in emergency measures against coronavirus

Economy Minister Paulo Guedes announced on 03/16 that the government intends to inject up to R$ 147.3 billion into the economy in the next three months to soften the impact of the coronavirus on the economy and the health system. According to the minister, most of the resources come from reallocations, credit lines and advance payments, without compromising fiscal space in the Budget.

According to Guedes, up to R$ 83.4 billion will be invested in actions for the most vulnerable population, up to R$ 59.4 billion for maintaining jobs and at least R$ 4.5 billion for the direct fight against the pandemic.

The minister defined as priorities three of the 19 proposals pending in the National Congress that are included in a letter sent last week to the presidents of the Chamber and Senate. The first is the Proposed Amendment to the Constitution of the Federative Pact, which decentralizes Union resources to states and municipalities. The second is the approval of the bill authorizing the privatization of Eletrobras, which will yield R$ 16 billion to the government this year.

The last proposal considered a priority by Guedes is the Fiscal Balance Plan, a program to help states with little indebtedness, but with financial difficulties because of the commitment of local budgets to civil servants.

The minister also cited measures that have already come into force, such as the release of R$ 135 billion in reserve requirements - a portion that banks are required to deposit with the Central Bank (BC) - and the National Monetary Council (CMN) decisions to support the renegotiation of corporate and household debts.

Download the presentation given by the minister can be done here.

jobs

In the job maintenance package, the government intends to allow the exemption, for three months, of businessmen's contributions to the FGTS (R$ 30 billion) and the Union's share in Simples Nacional (R$ 22.2 billion). The money will not be paid for 90 days, but the amount will be refunded within a period not yet defined. In the case of the FGTS, the economic team informed that overdue contributions can only be paid in 2021.

Another measure consists of a 50% reduction in contributions to the S System (which includes the National Service for Industrial Learning - Senai; Social Service for Commerce - Sesc; Social Service for Industry - Sesi; and National Service for Commerce Apprenticeship - Senac) by three months for a total of R$ 2.2 billion.

The Income Generation Program (Proger) of the Worker Support Fund (FAT) will boost credit to micro and small companies by R$ 5 billion. The government also intends to simplify the requirements for contracting credit and the waiver of a Clearance Certificate of Debt in the renegotiation of credit and to facilitate the clearance (clearance at customs) of imported industrial inputs and raw materials before landing.

fight the pandemic

In direct actions to combat the coronavirus pandemic, the government intends to allocate R$ 4.5 billion from the DPVAT fund to the Unified Health System (SUS). The money will be added to the R$ 5 billion of parliamentary amendments relocated to the SUS, released by provisional measure signed at the end of last week.

The government will also reduce import rates for medical and hospital products to zero until the end of the year, temporarily exempt from the Tax on Industrialized Products (IPI) for imported goods and domestically produced goods used in the fight against Covid-19.

The measures, explained the Ministry of Economy, are in addition to the suspension of proof of life for INSS beneficiaries for 120 days, tariff preference and priority in the clearance of products for medical and hospital use.

Source: Agência Brasil