Weekly Report - 31 July 2014 (WR-14-30)

BRAZIL| Industrialists demand fiscal reform. On 28 July the Brazilian confederation of industrialists (CNI) presented a document entitled Industry proposals for the 2014 elections which contains a set of “essential” proposals and recommendations to foster growth and competitiveness in the country. On 30 July, during a CNI-hosted meeting, copies of the document were handed over to the main presidential candidates taking part in the 5 October general elections – President Dilma Rousseff of the Partido dos Trabalhadores (PT), Aécio Neves of the centrist Partido da Social Democracia Brasileira (PSB) and Eduardo Campos of the Partido Socialista Brasileiro (PSB).  The CNI’s main demand is for a reduction in Brazil’s onerous tax burden which it complains currently limits the country’s growth rate (which the CNI forecasts will hover at 1.0% in 2014). The CNI, which also complains that the tax burden significantly increases the cost of opening new factories (by an estimated 10.6%), says that this tax reduction should ideally be accompanied by a simplification of the tax system itself and tax breaks for exports and investments. The document also calls for the government to boost spending on infrastructure which currently stands at R$73bn (US$32.5bn) per year. According to the CNI, this figure should be brought to at least 5% of GDP, or R$175bn (US$77.9bn). “The basis of CNI’s vision for the next four years is that there are numerous growth opportunities for the country and its industry but we need to overcome some challenges, the main one being competitiveness”, said José Augusto Fernandes,  the CNI’s director of policy and strategy, who presented the document. “Brazil has turned into an expensive and uncompetitive country”, he added.

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