Brasília - The primary surplus target (revenues minus expenditures, excluding interest payments) will remain unaltered, if it is up to the Minister of Finance, Antônio Palocci. "The government has already firmed a surplus at levels Brazil needs in the coming years," he affirmed.

According to the Minister, the primary surplus target equivalent to 4.25% of the Gross Domestic Product (GDP) has shown itself to be effective, since the ratio between government debt and the GDP has demonstrated "a very significant downward tendency."

"If we look back ten years, this curve took a turn upwards and kept rising. But now (with the current primary surplus), we can already discern a downward trend," the Minister said.

The Minister added that the government continues to study new measures to reduce the country's tax burden. He said that the economic team believes that there is some room for tax adjustments. Palocci affirmed, however, that a complete tax "design" for 2004 is still not ready.

On the other hand, he cited as a positive sign the revenues obtained from other taxes, which have expanded with the growth in economic activity. According to Palocci, this increment has allowed the government to work with tax adjustment measures that will be beneficial to economic activity.

Agência Brasil
Reporter: Daniel Lima
Translator: David Silberstein
08/23/2004