Rio Grande do Sul closes 2023 with a positive public account balance

Rio Grande do Sul closes 2023 with a positive public account balance
Rio Grande do Sul closes 2023 with a positive public account balance
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The Finance Department (Sefaz) of the State of Rio Grande do Sul released the results of the 2023 public accounts, during the Fiscal Transparency Report (RTF). Public accounts had a budget surplus of R$3.6 million. According to the data, the factors that contributed to the performance were the Fiscal Recovery Regime (RRF), which guaranteed a reduction of R$4.8 billion in the payment of debt installments in 2023. Another R$6 billion in revenue that entered the cash flow of the State (R$ 4 billion from the privatization of Corsan, R$ 1.4 billion net of compensation revenue from the Union related to ICMS losses from 2022 and R$ 627 million from Caixa Único income, recognized as revenue after reimbursement by the powers and autonomous bodies). Without these factors, there would be a deficit of R$7.2 billion in 2023.
Net Tax Revenue grew by R$1.5 billion in nominal values. With an increase of R$894 million compared to 2022 (R$44.9 billion), the ICMS had a nominal increase of 3.42%, below inflation for the period.
Rio Grande do Sul’s revenue projections in the new Tax on Goods and Services (IBS) led the State to propose an adjustment to the ICMS modal rate, as an alternative, a review of tax benefits so that the State can increase its participation in the new tax. This measure is projected to improve ICMS collection by around R$2.7 billion over the next three years, with R$1.4 billion still in 2024. Recovery of the previous level of collection is important for the State to pay debt obligations in the coming years and court orders.
Budget revenue increased by 12.05% compared to the previous year, but expenditure increased by 12.23%. This occurred mainly due to the increase in personnel expenses (adjustment of 9.46% in the teaching floor in 2023 and additional payment of R$ 1.0 billion in judicial personnel expenses) and the resumption of debt payments with the Union.
Last year, the State government managed to close the year with expenses for paying staff below the prudential limit defined by the Fiscal Responsibility Law (LRF). The government of Rio Grande do Sul closed the year 2023 spending 45.03% of current net revenue on servers. The LRF’s prudential limit is 46.55% and the maximum is 49%.

Even with the benefits of the RRF, its effect is lower than that caused by the monetary update of the debt, indexed by the Monetary Update Coefficient (CAM), which was mainly responsible for the increase of R$ 10.4 billion in the outstanding balance of the debt with the Union in relation to the previous year.

The article is in Portuguese

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