The Chamber is analyzing the Provisional Measure 453/09, which authorizes National Treasure to grant a loan of R$100 billion to Brazilian Development Bank (BNDES). That amount, according to the government, will be used in investment projects financed by the bank.

That PM is the seventh to be published since last year with the purpose to encompass the effects of the world financial crisis on Brazilian economy. According to the government, the R$100 billion will broaden the resources for investments in Brazil – since the crisis restrained the credit offer in the world – and thus avoid the interruption of ongoing projects.

Payment procedures
The financial engineering of the PM allows the Treasure to finance BNDES in two ways: by means of the sale of titles in the market, whose values will be transferred to the bank, and by the direct placement of the amount which is currently at the Treasure, and results from financial surpluses (resources from past budgets which were not used).

BNDES will also pay the loan in two ways, and with no deadline defined in the PM. According to the PM, 70% of the amount will be remunerated according to the Long-Term Interest Rate (TJLP), accrued of 2.5% per year. TJLP represents the basic cost of the loans granted by the bank and is established in 6.25% per year. Or be it, the remuneration of the Treasure would currently be 8.25%. The remaining installment of the loan (30%) will be remunerated by the same cost of foreign capital raising, in dollars, to the Treasure.

Tax impact
The Executive Power argues that that operation will not significantly raise public debt. Since that operation involves two public bodies, the launched titles will be accounted as Treasure liabilities and as assets of the Union. Or be it, in accounting terms, the effect would be void.

According to the government, the tax cost of the available funds of the Treasure directly put into BNDES would be reduced, according to the government, to the equivalent to the cost of the capitation to the Treasure and to the remuneration to be paid by the bank. The PM does not bring, though, an estimate on the tax impact.

Postponed collection
The PM has two devices which postpone the collection of taxes to sponsors of pension funds. According to the text, they will not need to pay in advance taxes on the so called “reversions”. That is how gains in funds from benefit plans transferred to sponsors are called.

The Income Tax on Corporations (IRPJ), the Social Contribution on Net Profit (CSLL) and the Contribution for the Financing of Social Security (Cofins) and the Contribution to PIS/Pasep currently fall on reversions.
They are paid according to the criteria of competency – the sponsor pays even if the resources of the reversion have not yet entered the cash of the company.

After the change, taxes are collected according to the cash criteria: the taxes are paid at the moment the reversion effectively enters the account of the sponsor. The change in the collection procedure has prevailed since the fiscal year of 2008.

Procedure
The PM will be analyzed at the House Floor and will lock the agenda of the House where it is being processed from March 19 on. It is valid until June first.

Report - Janary Júnior
Editing - João Pitella Junior
Translation - Positive Idiomas Ltda