Measuring Equalization Policies, Part 1 The Brazilian Data. Sandra Gomes (Federal University of Rio Grande do Norte/Centre for Metropolitan Studies)

Transcription

1 Measuring Equalization Policies, Part 1 The Brazilian Data Sandra Gomes (Federal University of Rio Grande do Norte/Centre for Metropolitan Studies) Seminar of the joint UK-Brazilian Project on Exchanching Data and Skills on Place-Inequality. University of Edinburgh, 7-8 September 2010

2 Topics CEM s Database and Indicators Subnational Revenue Data (states + municipalities), two main sources: Self-generated tax revenue (own tax) Mechanisms of Intergovernamental Transfer Subnational Spending Data

3 Overall Information on Brazilian Data National Treasury Secretary (STN)/Federal Ministry of Finance Very detailed revenue, indebtness and personnel On the Internet All Constitutional Regulations Own tax revenue, in Brazil, does not mean complete freedom to spend 26 States + the federal district - map 5,564 municipalities

4 Revenue Data States and the FD Own Tax Renevue (Self-generated), Value Added Tax (ICMS), Automobile Tax (25% to be transferred to municipalities) No redistributive formula* example of database * In 2008, for instance, the ICMS represented 62% of total revenue in the southern state of Paraná but only 14% in the northern state of Amapá.

5 Revenue Data States + FD database Example CAMPO DISCRIMINAÇÃO PA SP 1 Receita Total = ( ) Total Revenue , ,23 2 Receitas Correntes = ( ) Current Revenue , ,29 3 Receita Tributária = ( ) Tax Revenue , ,03 4 Impostos = (5+13) Taxes , ,33 5 Impostos sobre o Patrimônio e a Renda = ( ) Taxes on Assets and Income , ,28 6 Imposto sobre a Propriedade Predial e Territorial Urbana IPTU Imposto sobre a Renda e Proventos de Qualquer Natureza IR = (8+9) Income Tax ,24-8 Imposto de Renda Retido na Fonte sobre os Rendimentos do Trabalho IRRF -Income tax automatically deducted from wages ,24-9 Imposto de Renda Retido nas Fontes sobre Outros Rendimentos Imposto sobre a Propriedade de Veículos Automotores IPVA Automobile Tax , ,36 11 Imposto sobre Transmissão "Causa Mortis" e Doação de Bens e Direitos ITCD , ,92 12 Imposto sobre Transmissão "Inter Vivos" de Bens Imóveis e de Direitos Reais sobre Imóveis ITBI Impostos sobre a Produção e a Circulação = (14+15) , ,05 Imposto sobre Op. Relativas à Circulação de Mercadorias e sobre Prest.de Serv.de Transp. Interest.e 14 Interm. e de Comunicação ICMS Value Added Tax , ,05 15 Imposto sobre Serviços de Qualquer Natureza ISSQN Taxas = (17+18) Fees , ,29 17 Taxas pelo Exercício do Poder de Polícia , ,51 18 Taxas pela Prestação de Serviços , ,78 19 Contribuição de Melhoria , consolidated data

6 Revenue Data States and the FD Intergovernamental Transfers From the Federal Government: States Participation Fund (FPE) highly redistributive* Tax on Industrialized Products for Export (no equalisation; return ) Strictly Conditional Transfers (social policies)** * 85% to N, NE and CO - formula that takes into account population size and the reverse of per capita income levels; IR and IPI (21,5%) ** mainly: National Health System ( SUS ), Education Programmes. Smaller degree: Social assistance programmes, basic sanitation, protection of the environment.

7 Revenue Data States and the FD Simulation Sources of State Revenues Self-generated tax revenue (total receita tributária )** % in total state Revenue* (2008) 61,1% Federal Tax Sharing Schemes (FPM and others)** 12,8% Net transfers for Social Policy*** (all types of intergovernmental transfers) 4,0% * total revenue = current revenue + capital revenue + other revenue constitutional deductions («receita orçamentária»). ** Before constitutional deductions for education ( fundeb ). *** Social policies: education («Fundeb») + National Health System «(«SUS») + social assistance + basic sanitation. Includes current and capital transfers.

8 Revenue Data Municipalities Own Tax Renevue (Self-generated), Service Tax, Urban Building and Property Tax, Property Transfer Tax No sharing schemes example of database

9 Revenue Data Municipalities

10 Revenue Data Municipalities Intergovernamental Transfers From the Federal Government: Municipal Participation Fund (FPE) based on population size (redistribution)* Tax on Rural Land and Tax on Gold Financial Operations (no equalisation, return ) Strictly Conditional Transfers (social policies) same as States, but includes hunger combat programme (Lula s government). * The formula is quite complex: 10% goes to capital cities combining population and income per capita criteria (less income, more resources); 84,6% goes to non-capital municipalities according to a population-based formula and the remaining 3,6% goes to noncapital municipalities with larger population; 23,5% of IR/IPI

11 Revenue Data Municipalities Intergovernamental Transfers from States Governments: Value Added Tax (no equalisation, return ) Automobile Taxes (no equalisation, return ) Tax on Industrialised Products-Export (no equalisation, return ) Multi-governmental transfers

12 Revenue Data Municipalities Table 4 Summary of the Main Sources of Municipal Revenue Brazil, 2008 Sources of Municipal Revenue % in total municipal Revenue* (2008) Self-generated revenues (total receita tributária )** 18,7 Federal Tax Sharing Schemes (FPM, ITR and IPI-Ouro)** 18,8 State Tax Sharing Schemes (ICMS, IPVA, IPI-export and CIDE)** 24,3 Net transfers for Social Policy*** (all types of intergovernmental transfers) 16,1 * total revenue = current revenue + capital revenue + other revenue constitutional deductions («receita orçamentária»). ** Before constitutional deductions for education ( fundeb ). *** After constitutional deductions for education ( fundeb ). Social policies: education («Fundeb») + National Health System «(«SUS») + social assistance + hunger programme + basic sanitation. Includes current and capital transfers.

13 Revenue Data Main Indicators used by CEM s team For each Municipalities and State/FD Revenue per capita (1. self-generated 2. transfers 3. conditional transfers 4. total) % of revenue on total revenue Gini Coefficient (1. municipalities 2. states/fd)

14 Spending Data - Subnational less detailed compared to revenue (Internet data), except personnel Functional categories (16) example health and sanitation limitation on time series Recent adjustments ( sub-functions, from 2004 over 130) only subnational budgets* * excludes all social security made nationally by the federal government

15 Spending Data Example States/FD Functional Spending categories (before 2001) 1. public debt and interest rates % on total spending in 2008 Accumulated percentage 24,9% 24,90% 2. education and culture 17,1% 42,00% 3. health and sanitation 12,6% 54,60% 4. social assistance and social security 11,8% 66,40% 5. public safety/security 8,2% 74,60% New Functional Spending Categories (after 2002) payment of public debt and % on total spending in 2008 interest rates 24,9% education 16,5% culture 0,4% sports and leisure 0,2% health 11,0% sanitation 1,1% environment 0,5% social security 11,1% social assistance 0,7% national defence 0,0%

16 Spending Data Example Municipalities New Functional Categories % on total spending (2008) Accumulated percentage education 24,8% 24,8% health 22,0% 46,8% administration 12,6% 59,4% urbanism 12,0% 71,4% social security 5,4% 76,9% public debt and interest rates 4,4% 81,3% transport 3,2% 84,5% social assistance 3,0% 87,5% sanitation 2,8% 90,3% Others 9,7% 100,0%

17 Spending Data Main Indicators used by CEM s team Indicators of Patterns of Spending - % of each function on total spending Indicators of Spending Capacity - per capita subnational spending Indicators of Place Inequality - Gini coefficient of spending capacity (per capita)

18 States + Federal District

19 Municipalities

20 Regions Return

21 Extras Table 1 Information on Subnational Finance Database Selected Years FINBRA database % of municipalities included 76% 94% 90% 77% 91% Total of Revenue Variables Total of Spending Variables Over 200

22 Extras