Forum Board Member Discusses Imbalance of Municipal Finances at Brazil Roundtable

Opening the series of debates regarding the growing imbalance of municipal finances, fiscal public managers discussed the current context of the financial difficulties of municipalities during the Third Meeting of Municipalities with Sustainable Development (III EMDS) held in Brasilia, Brazil between 7-9 April, 2015. Participants identified a broad trend of growing efforts in tax collection and spending control.

Political actions against measures that afford more financial responsibility to municipalities but which make no financial contribution were discussed during the debate. ”To avoid increasing the tax burden, we need efficient revenue collection and spending,” said the Mayor of Divinópolis (MG) and Vice President for Public Affairs Management of the National Front of Mayors (FNP), Vladimir Azevedo. According to the mayor, the extent to which Brazilian municipalities can become sustainable will depend on their ability to manage and control public spending.

Cooperation between federal entities

As balancing the public accounts of municipalities becomes increasingly difficult, debates are raised about the quality of public spending and ensuring the economic stability of cities.
The schedule for the implementation of the national repository of invoices and electronic services, that will be presented at the next National Meeting of Tax Administrations, was also discussed by attendees.

According to Roger Wilkins, a member of the Board of Directors of the Forum of Federations, “the Brazilian tax system is extremely complex, one of the most complex in the world.” Mr. Wilkins emphasized that cooperation is a strong mechanism that can be used to prevent tax evasion without competition between different municipalities.

The EMDS is the largest event in Brazil focused on sustainable urban development. It is a space for the mobilization of decision makers and public managers from all three levels of government that provides an opportunity for debates, reflection and exchange of experience with a view to improving the quality of life for the population of cities. Every year it is organized by the National Front of Mayors in association with the Brazilian Support Service for Micro and Small Enterprises (Sabrae).

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