September 13, 2019


1. Secretary who advocated for a new tax fired from administration

On Wednesday, Special Secretary of the Department of Federal Revenue Marcos Cintra was fired. Cintra was an advocate for the creation of a tax on financial transactions similar to the unpopular CPMF (Provisional Contribution on Financial Transactions), which was in effect in Brazil from 1994 to 2007. President Jair Bolsonaro was not happy when information from a study on the tax leaked to the public. The study proposed the introduction of a 0.4% tax on cash withdrawals and deposits. Before Cintra was fired, Economy Minister Paulo Guedes had defended the tax in an interview, stating that it could generate R$ 150 billion (USD $37 billion) a year for the administration. Bolsonaro had already argued with Cintra on other matters, claiming the Department of Federal Revenue had been relentlessly looking into his and his family’s finances. Soon after Cintra was fired, Bolsonaro said tax increases are not part of tax reform plans. Read the analysis of Cintra’s firing at Brasília Report.

Folha de S.Paulo: Bolsonaro demite defensor da criação de novo imposto
O Globo: Não foi só a CPMF que derrubou secretário da Receita Federal
Valor Econômico: Novo imposto poderia arrecadar até R$ 150 bilhões por ano
Folha de S.Paulo: Confira as principais propostas da reforma tributária

2. Minister says he plans to privatize every state company

In an exclusive interview published by Valor Econômico newspaper on Monday, Economy Minister Paulo Guedes said he aims to disconnect, detach and release public spending in Brazil: “I want to privatize every state company. Congress will decide. This is the proposal.” Guedes wants to fast track sales and concessions of state companies and shorten negotiations –which usually take a year and a half. Instead of selling companies one by one, Guedes says he will make a list of all the state companies that will be sold. If President Bolsonaro approves the list, the companies will be added to the privatization program. However, the list will first have to be approved by the Court of Accounts and the Congress.

Valor Econômico: Guedes diz que vai privatizar todas as estatais

3. New telecommunications law could stimulate investments

After three years awaiting Congressional approval, the Senate approved a law that changes the legal framework for telecommunications companies. The administration expects the changes to stimulate investments in the country of up to R$ 34 billion (USD $8.4 billion). The new law will allow telephone operators currently obligated to invest in the maintenance of public phones as part of their concession agreement, to choose where they want to invest their money. Even members of the opposition approved the new legal framework. According to members of the administration’s economy team, the new telecommunications law will not be altered or vetoed by President Bolsonaro.

Folha de S.Paulo: Nova lei das teles e pode destravar R$ 34 bi em investimentos
Valor Econômico: Lei das teles não precisa de nenhum veto, diz secretário

4. Number of flexible work contracts nearly triples in one year

The number of people in Brazil who are hired by the hour or by the day almost tripled in the first seven months of 2019 in comparison to the same period of 2018. By July of this year, there were 76,000 such hirings. Flexible work contracts, also known as intermittent work regimes, became a possibility with the 2017 approval of labor reform. Both employers and employees need to agree to this type of contract. The employee has the same rights as full time workers such as paid leave and a holiday bonus known as the “13th salary” but receive benefits proportional to their work. The intermittent work regime has already been adopted by 2,200 companies. Economists say the regime is positive, but employees still need more reassurances regarding pension contributions.

GloboNews: Trabalho intermitente quase triplica em um ano
O Globo: Comércio varejista cresce 1% em julho, no terceiro mês seguido de alta

5. Brazil places 7th in universities ranked by Times Higher Education

Brazil has the seventh highest number of universities in the world included in this year’s Times Higher Education (THE) ranking, overtaking Italy and Spain. Out of the 1,396 universities assessed by THE in 96 countries, 46 are Brazilian, made up of 39 public and seven private secondary institutions. The best ranked university in Brazil was USP (Universidade de São Paulo), which also leads the rankings in Latin America. Despite the positive performance, no Brazilian university figures among the world’s 250 best. The top ranked school in the world is Oxford University in the United Kingdom. Around the same time as the THE ranking was published, the Brazilian government announced that it was reactivating 3,182 scholarships for post-graduate courses, which had been cut at the beginning of the year and resulted in protests. This year, the administration will invest R$ 22.4 million (USD $5.9 million) in higher education.

Folha de S.Paulo: Brasil amplia participação em ranking mundial
O Globo: Ministério reativa bolsas estudantis cortadas no início do ano 

Brasilia Report

Click here for the Brasilia Report, a weekly analysis prepared by JeffreyGroup Senior Advisor in Brasilia, Gustavo Krieger.