2ND PROGRAMMATIC FISCAL REFORM ADJUSTMENT LOAN

closed

The objective of the Government's fiscal reform program are to reduce Brazil's remaining macroeconomic vulnerabilities, and thus promote sustainable growth and poverty reduction. This opportunity comes at a time of unusually adverse external environment, which poses grave economic risks. The new government needs to quickly build a record of credibility that will enable Brazil to improve its access to international markets. The proposed Second Programmatic Fiscal Reform Loan for Brazil addresses two of the four broad objectives of the Government's fiscal reform: 1) institutionalization of responsible and credible fiscal policy and risk management; and 2) improvements in efficiency in the revenue structure and further strengthening of the tax administration. Within the context of the first broad objective, the loan will support: a) strengthening of macro-fiscal planning; b) effective control of sub-national debts and sub-national fiscal discipline; c) improvements in fiscal transparency and reporting; d) capacity building in public debt management and its further institutionalization; and e) market development for government securities. With respect to the second broad objective, the loan will support a tax reform to reduce distortionary effects on the national economy