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No Internal Consensus, Government Bets on Changes to the Worker Food Program and Tax Cuts to Try to Curb Inflation
On the eve of May 1st, the Lula government (PT) is still seeking solutions to curb the rising food prices. Even with several proposals under discussion, there is still no consensus within the economic team. The problem is serious: food prices continue to exert pressure on inflation and the budgets of Brazilian families.
IPCA-15 Indicates Inflation Increase Driven by Food
According to the IPCA-15 released on Friday (4/25), the preliminary official inflation rate showed an increase of 0.43% in April. The main driver of this increase was the food and beverage group, with a variation of 1.14% and the largest individual impact on the index.
Betting on the Reformulation of the PAT
In this scenario, the government is betting on the reformulation of the Worker Food Program (PAT) as a strategy to try to lower the cost of food.
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On April 9th, Finance Minister Fernando Haddad stated that new rules for the meal voucher (VA) and meal ticket (VR) would be published by May.
The expectation is that changes in the billing model at commercial establishments will result in lower meal prices.
Currently, the high rates applied to vouchers may be passed on to the consumer. The government believes that with new regulations, establishments would have lower costs, which would help ease inflation.
Changes Expected for the Program
The PAT is a program that provides food benefits to workers earning up to five minimum wages. Companies’ participation is voluntary, but there are tax incentives for those that offer the benefit to all employees.
Among the changes being considered are the regulation of portability and interoperability of benefits. Portability would allow workers to choose the card of their preference. Meanwhile, interoperability would allow all cards to be accepted at the same machines.
Additionally, supermarkets suggested to the government a restructuring of the PAT, creating the so-called PAT eSocial. However, benefit companies point out that these changes may not necessarily impact the final price of food.
Tax Exemption Yet to Have Clear Effect on Inflation
Another measure adopted was the reduction of the import tax on nine food products. The exemption was approved by Camex in March. However, according to Herlon Brandão, director of Statistics and Foreign Trade Studies, it is still early to assess the impact of the measure on prices.
He explained that the exemption came into effect on March 14th and that the real effects can only be better analyzed in the April data.
With information from Blog do BG.
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