Tax Reform in Brazil: The Long Process in Progress
A tax reform process is now in course in Brazil. It started in 1995, when the President of the Republic presented to the National Congress a proposal to amend the chapter on the tax system of the Brazilian Federal Constitution (PEC 175/95). During the more than seven years of stop-and-go discussion, the process provided only two practical results: the so-called Kandir Law that modified the chief state tax ? on the circulation of merchandises and on communication and interstate and intermunicipal transportation services (ICMS) ?, but which effects have been partially postponed by subsequent laws; and a recent law, which has mitigated the cascading of a social contribution. 1 Discussion of the constitutional amendment, which was interrupted in the first quarter of 2000, is expected to resume in 2003. This paper discusses the tax reform process in course.
Institutions for Macro Stability in Brazil: Inflation Targets and Fiscal Responsibility
Monetary and fiscal institutions have played a decisive role in the stabilisation of the Brazilian economy since the mid-1990s. Brazil’s experience of designing and managing institutions to this end is likely to be of interest to other emerging and low- or middle-income economies. In Brazil institutional reforms were predominantly made in response to a succession of internal and, particularly, external crises. Indeed, perhaps nowhere in the world has inflation received as much attention from economists as in Brazil. The consequent accumulation of theoretical and practical knowledge resulted in a wealth of theories about the nature of Brazilian inflation. As such, the Brazilian experience offers many lessons to be learned, both in the sense of what could be done and what is better avoided. When it abandoned the exchange rate anchor, Brazil was one of the first emerging economies to adopt a system of inflation targets. In the area of fiscal policy, a succession of institutional changes – from changes in the budget and management of the public debt to the fiscal adjustment of regional governments – culminated in the adoption of the Fiscal Responsibility Law shortly after the introduction of new monetary and exchange policies. However, consolidation of the new currency, the Real, and accelerated growth shortly after the turn of the century, followed by the global financial crisis, meant that the agenda of structural reforms was abandoned. New aspects were introduced to economic policy, such as a strong link between the growth of public debt and credit supply.Recent stagnation, with repeated years of low growth, inflation pushing at the ceiling of its target, and primary surplus below its target, sets new challenges for the Brazilian economy.
Industrial Relations in 1988
Undoubtedly, the election of the Hawke Labor Government in 1983 marked a turning point in Australian industrial relations. To a large extent industrial turbulence receded, helped along by global econ omic instability and the influence ofthe Prices and Incomes Accord between the Australian Labor Party and the Australian Council of Trade Union (ACTU). Arguably, the apparent success of the Accord owed something to a widespread concern within unions that the election of a Liberal-National Party government at the federal level would have resulted in a major pro gram of economic regulation, especially in relation to the institutions ofthe labour market. During 1988, despite an increasingly buoyant economy, the continuing influence of these economic and political conditions ensured that the level of industrial disputation remained subdued by historical stan dards, though those opposed to the nascent corporate state or centralised wage fixing may have been heartened by signs that wage restraint was fraying at the...