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Recte Rempublican GerereGerindo a coisa pública corretamenteGood Management of the Public Good
Using the Doing Business Methodologyin the
Estado do Rio de Janeiro
Joaquim V. F. LevySecretaria Estadual de Fazenda - RJ
April 2007
2
Estado do Rio de Janeiro, land of diversified business
Rio de Janeiro, financial and historical center
Rio de Janeiro, PROJAC TV& movie studios
P 40 oil platform on her way to Rio de Janeiro
Recte Rempublican GerereGerindo a coisa pública corretamenteGood Management of the Public Good
3
Rio de Janeiro, a player in the local and global economy
Área (km²) Population
GDP (US$ billion at official exchange rate)
Rio de Janeiro 43.696 15.383.407 118,2140,0*
Czech Republic 78.866 10.235.455 118,9Portugal 92.391 10.605.870 176,6Belgium 30.528 10.379.067 367,8Chile 756.950 16.134.219 111,8Colombia 1.138.910 43.593.035 105,5Venezuela 912.051 25.730.435 147,9
Source: CIA Yearbook (does not reflect recent GDP revision)* GDP from state statistical bureau CIDE
Recte Rempublican GerereGerindo a coisa pública corretamenteGood Management of the Public Good
State GSP Rank Florida: $594,525,000,000.00 #4 New Jersey: $415,891,000,000.00 #8 Tennessee: $216,939,000,000.00 #18 Connecticut: $187,086,000,000.00 #23 Louisiana: $151,993,000,000.00 #24 Kentucky: $135,412,000,000.00 #26 South Carolina: $135,253,000,000.00 #27 Oregon: $128,126,000,000.00 #28 Iowa: $114,269,000,000.00 #29 Kansas: $99,090,000,000.00 #32 Mississippi: $76,205,000,000.00 #35 Delaware: $54,500,000,000.00 #40 Maine: $43,279,000,000.00 #45 Montana: $27,701,000,000.00 #49
Estado do Rio de Janeiro - ERJ can be viewed as a small open economy
ERJ, as does the typical US state, faces tax competition within the country
4
Exports in US$ billionRio de Janeiro BRAZIL % share
2003 4.844 73.084 6,63 2004 7.025 96.475 7,28 2005 8.191 118.308 6,92 2006 11.470 137.470 8,34
Exports of Estado do Rio de JaneiroUS$ Billion
02468
101214
2000 2001 2002 2003 2004 2005 2006
Steel Production (thousand of tons)
Production capacity of semifinished steel is expectedto double to 16 M ton/year by 2012, allowing Rio tobecome the top steel maker in Brazil
Semi-finished share Processed shareMINAS GERAIS 955,8 35,4 861,0 34,9 SÃO PAULO 586,1 21,7 521,7 21,2 ESPÍRITO SANTO 510,4 18,9 469,7 19,0 RIO DE JANEIRO 477,8 17,7 444,7 18,0 TOTAL 2.703,3 100,0 2.465,7 100,0 Fonte: IBS
StateJanuary 2007
Estado do Rio has a strong industrial and export base
Total Oil Production(million barrels per day)
5) Mexico 3.87) Canada 3.18) Norway 3.09) UAE 2.810) Venezuela 2.811) Kuwait 2.712) Nigeria 2.613) Algeria 2.114) Brasil 2.0
Rio de Janeiro 1.7
Top World Oil Producers, 2005*
Rank Country
Recte Rempublican GerereGerindo a coisa pública corretamenteGood Management of the Public Good
5
R$ Million Eur Million (R$ 2,74/Eur) Share Growth
2005/2004 R$ Eur (R$ 2,74/Eur)
Estado 277.608 101.317 100,0% 4,9% 18.080 6.599 Metropolitan Area 167.834 61.253 60,5% -0,2% 14.811 5.406 Paraíba Industrial Valley 25.972 9.479 9,4% 22,7% 30.901 11.278 North 9.394 3.428 3,4% 12,7% 12.495 4.560 Highlands 7.418 2.707 2,7% 1,0% 9.370 3.420 North Coast 6.205 2.265 2,2% 11,3% 8.168 2.981 Green Coast (Angra) 3.551 1.296 1,3% -4,2% 11.966 4.367 Central South 2.133 779 0,8% 2,6% 7.909 2.887 Northwest 2.057 751 0,7% 9,2% 6.578 2.401 Offshore (oil & gas) 53.044 19.359 19,1% 14.9%
Region2005 GDP per Capita2005 GDP
Source: Fundação CIDE
Rio´s economic activity is being spread throughout the state
Resende Peugeot – Porto Real Galvasud – Porto Real
Recte Rempublican GerereGerindo a coisa pública corretamenteGood Management of the Public Good
6
Planned or Underway
Petrobras Refinery (COMPERJ) – US$ 6,5 billion through 2010 for basic unit (phase I). It will process 150 Mbb/day, producing diesel, ethylene, propylene, benzene, butadiene in the first phase; second phase (US$ 6 billion additional investment) to produce polyethylene, PET, PTA, ethylene-glycol and styrene.
Petrobras: U$ 26 billion in oil and natural gas R&D and production
CSA: Companhia Siderúrgica do Atlântico (Thyssen-Krupp) - US$ 3,5 billion. Steel production for export as of 2009
GERDAU: US$ 1 billion – Special Steels ; Votorantim Metais (Siderúrgica Barra Mansa): US$ 600 million
CSN II: US$ 2,5 billion – Steel Production for domestic and export markets
Porto Açu – Bulk Terminal in the North providing new outlet for minerals from Minas Gerais
Tourism – a new generarion of resorts with beatiful beaches and plenty of privacy
Recently Concluded
Rio Polímeros: US$ 1,2 billion (2/3 private sector) already producing 500,000 ton/year of ethylene, 75,000 ton/year of propylene, and 540,000 ton/year of polyethylene products
Michelin: US$ 500 million for new tire plant – Leader in off-road tires; VW – Caminhões: leader in truck production in Brazil and in productivity worldwide; Peugeot–Citroën: Top among entrants after 1990, holding 6% of domestic market
Galvasud (steel lamination for auto industry, etc.); Guardian (flat glass maker); Schulz e Weelstream (products for the oil industry), RioCim (cement)
Shipyards: investments to supply the oil industry boosted sales tenfold from 2000 to R$ 4 billion in 2005; new orders of tankers from Petrobras will further boost the sector; new shipyard in the North (norwegian capital).
Beverages: five new plants, of which the one built by AMBEV is the largest plant in the Américas
Selected Recent Investments
Recte Rempublican GerereGerindo a coisa pública corretamenteGood Management of the Public Good
7
Jobs created in the last five yearsGDP by sector
Share of value added (2003)Source: IBGE
Agriculture 0,5%
Industry (incl. Oil) 50,2%
Services (incl. Comm) 44,8%(Fin. Dummy) -4,0%
Taxes 8,5%
GDP at current prices 100,0%
Telcomm Hub and Convention Center
Steady job creation with a strong service sector
-100.000
0
100.000
200.000
300.000
400.000
500.000
2002 2003 2004 2005 2006 2007
Total
Services
Commerce
Industry
Recte Rempublican GerereGerindo a coisa pública corretamenteGood Management of the Public Good
8
0
10
20
30
40
50
60
Own PC Use the Internet Own cell phone
405060708090
100
Electricity Fixedphone
Frig WashingMachine
TV
0500.000
1.000.0001.500.0002.000.0002.500.0003.000.000
Pre-School Elementaryand Middle
School
High School University
Rio de Janeiro, capital of advanced studies
Widespread Availability of Services and Equipments **
** Proportion of people aged 10 or more with access to service or owing the equipment
21.00562.145
360.657
StateInstitutionsFederalInstitutionsPrivateInstitutions
University enrollment by type of institution98% enrollment at ages 7-14; 88% ages 15-17
Students enrolled by school level
Recte Rempublican GerereGerindo a coisa pública corretamenteGood Management of the Public Good
Rio hosts a diversified financial center featuring:
•Securities Exchange Regulator •Insurance Regulator•Central Bank open-market desk•National Association of Financial Institutions
• National Development Bank •Treasury and Brokerage operations of Banco do Brasil• Major Pension Funds
• Agile banks: BBM, key business lines of UBS/Pactual• Top hedge funds (Gavea and many others)• Leading Insurance Companies (Icatu-Hartford, SulAmerica, Bradesco) and IRB—Brazil Re
SELIC
Recte Rempublican GerereGerindo a coisa pública corretamenteGood Management of the Public Good
10
A sour spot: crime and homicides
Homicides in selected cities Homicides in selected countries
Brazil 27
Colombia 63South Africa 51Jamaica 32
Memo: Suicide Rates
Venezuela 32Russia 19Mexico 13United States 4Czech Republ. 1,7United Kingdom 1,7Germany 1,1
COUNTRY Murders/100,000 peopleRio de Janeiro (2006) 57Washington D.C. 46Detroit 42Baltimore 38Chicago 22Johannesburg (2001) 75Moscow (2003) 20
Murders/100,000 people (2003)
Country Year Males Females
AUSTRALIA 2001 20.1 5.3
BELGIUM 1997 31.2 11.4
BRAZIL 1995 6.6 1.8
CZECH REPUBLIC 2003 27.5 6.8
GERMANY 2001 20.4 7.0
REPUBLIC OF KOREA 2002 24.7 11.2
RUSSIAN FEDERATION 2002 69.3 11.9
UNITED KINGDOM 2002 10.8 3.1
USA 2001 17.6 4.1
Recte Rempublican GerereGerindo a coisa pública corretamenteGood Management of the Public Good
Recte Rempublican Gerere Gerindo a coisa pública corretamenteGood Management of the Public Good
Using Doing Business is part of a strategy to further enhance the competitiveness of the Estado do Rio de Janeiro
Tax pressure e policy
Expenditure policy
Regulatory environment
Making life easier
Volta Redonda Steel Mills
Recte Rempublican Gerere Gerindo a coisa pública corretamenteGood Management of the Public Good
-5.000
10.00015.00020.00025.00030.00035.00040.000
2002
2003
2004
2005
2006
2007
Outras ReceitasOutros TributosFECPICMS
Overall revenues have been increasing, owing mainly to economic growth and oil revenues (royalties); State VAT (ICMS) has been less buoyant, despite surtaxes on telecom and electricity, which were introduced in 2003 and are candidates for review
Other RevenuesOther TaxesVAT Surtax
VAT
Tax Policy: Royalties and Taxation
Revenues in millions of reais
0,0
5,0
10,0
15,0
20,0
25,0
30,0
35,0
40,0
2000 2001 2002 2003 2004 2005 2006%
Royalties as % of State VAT
Recte Rempublican Gerere Gerindo a coisa pública corretamenteGood Management of the Public Good
Taxes: State VAT tax pressure in selected Brazilian states
50%
100%
150%São Paulo
AVG Brazil
Rio Grande do Sul
Santa Catarina
Minas Gerais
Pernambuco
Bahia
Paraná
de Janeiro
Distrito Federal
ICMS/GDPICMS/HH_incomeICMS/POPICMS/KWh
Rio de Janeiro = 100%
Rio de Janeiro
Recte Rempublican Gerere Gerindo a coisa pública corretamenteGood Management of the Public Good
Tax Policy: relative state VAT—ICMS tax pressure (RJ=100)
40%
60%
80%
100%
120%
140%
160%
180%
AVG Braz
il
Rio Gran
de do
Sul
Santa
Catarin
aMina
s Gera
isPern
ambu
coBah
iaRio
de Ja
neiro
Distrito
Federa
lICMS/GDPICMS/HH_incomeICMS/POPICMS/KWh
Recte Rempublican Gerere Gerindo a coisa pública corretamenteGood Management of the Public Good
-500
1.0001.5002.0002.5003.0003.5004.0004.500
EDUC
SEGROUTR EXEC
OUTR PODERESPREVI-B
ANERJ
Inativo &Pens.
Ativo
8.000
8.500
9.000
9.500
10.000
10.500
11.000
11.500
12.000
2003 2004 2005 2006-
500
1.000
1.500
2.000
2.500
3.000
3.500
4.000
EXECUTIVO *Outros Poderes
Spending in personnel (R$ million) Share of pensions in state payroll
Payroll expenditure of both the Executive and the other government branches (Justice and Legislative) has grown in recent years, reducing the ability of the state to provide services and finance investment
Expenditure Policy: taming payroll outlays
16
Regulation: Investment & CompetitivenessTargeted investment in infrastructure: complete current projects,
articulate local authorities and leverage the private sector;Integrate public transportation, which is run by the private sector, to
unlock new real estate opportunities and increase workers’ productivity (WB support has been pivotal);
Implement a logistic hub to fully benefit from the beltway under construction (Arco Rodoviário) and foster the development of a distribution chain offering accessible transfer and processing areas in the metropolitan area (Baixada Fluminense)
Itaguai Terminal Supervia Mass Transportation Network
Recte Rempublican GerereGerindo a coisa pública corretamenteGood Management of the Public Good
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New Thyssen Steel Mill
MODERN CONTAINER TERMINAL
Baixada Fluminense – Logistic Interland
International Airport
New PetrochemicalCOMPERJ Plant
Road to Bahia
Rio Polimeros and CaxiasPetrochemical Plant and Refinery
Road to São Paulo
Road to Minasand Brasilia
Recte Rempublican GerereGerindo a coisa pública corretamenteGood Management of the Public Good
The Rio de Janeiro Beltway and Logistics Hub
Recte Rempublican Gerere Gerindo a coisa pública corretamenteGood Management of the Public Good
Sugarcane field * Automated harvest * Distillery Storage Tanks*
Distillery with Cogeneration Plant*Automobile Ethanol Fuel*
Traditional sugarcane fields to be revitalized
The private sector: engine for the revitalization of green energy production areas
Potential to double planted area to up to 1 million acres
* Illustrative pictures, not necessarily taken in ERJ
Recte Rempublican Gerere Gerindo a coisa pública corretamenteGood Management of the Public Good
How can Doing Business help develop business in the Estado do Rio de Janeiro
1) Understand the main features of the measure and how Brazil and the State are ranked
2) Find the changes with greater potential to improve business conditions and pick priorities
3) Find out who the agents for change are and how they can cooperate
4) What has been done in the first three months of government and what comes next
Recte Rempublican Gerere Gerindo a coisa pública corretamenteGood Management of the Public Good
1) How can Doing Business help: understanding DB
Placed as 121th in the DB rank, Brazil could look as a quite complicated place to do business, despite its Trillion-Dollar economy
-120
-100
-80
-60
-40
-20
0
20
ARGCHLCOLMEXCHNRUSIN
DZAFTURPHLBGRCZEAUSDEUESPKOR
LABRICSEMOECD
Relative position of Brazil in the DB rank vis-a-vis selected countries
Recte Rempublican Gerere Gerindo a coisa pública corretamenteGood Management of the Public Good
1) Understanding DB
Surprisingly, Brazil is heavily penalized in the“investment protection” and “asset recovery” components
-0,80
-0,60
-0,40
-0,20
0,00
0,20
0,40
0,60
STA
RT
LIC
ENSE
S
EMPL
OY
REG
_PR
OP
CR
EDIT
PRO
T_IN
VST
TAXE
S
TRA
DE
ENFO
RC
CLO
SE
ARGCHLCOLMEXCHNRUSIND
Recte Rempublican Gerere Gerindo a coisa pública corretamenteGood Management of the Public Good
1) Understanding DB
Bankruptcy is common in Brazil: a major reform in 2004 has eased the process, aligned incentives and changed claimant seniority to foster credit to companies;
The Brazilian stock exchange is well established and has a strong focus on corporate governance: most IPOs are now made under quite stringent governance rules and foreign investors are major players;
Foreign investors in Brazil have never been expropriated and are free to send profits back;
Aligning Brazilian indicators in these two areas would have a distinct impact in the rank of Brazil:
Current rank: 121 Aligned rank: 90-95
Recte Rempublican Gerere Gerindo a coisa pública corretamenteGood Management of the Public Good
1) Understanding DB
Know BEST – Brazilian Excellence in Securities Trading™
Code RANK Percentile Disclosure
Index
Director Liability Index
Shareholder Suits Index
Investor Protection
Index
gof
protecting investors
(percentile
Recovery rate (cents
on the dollar)
Ease of closing a business
(percentile) BRA 121 0,58 5 7 4 5,3 0,5 12,1 0,77 BRA * 93 0,51 -- -- -- 6,5 0,1 30,0 0,44 BRA ** 80 0,49 -- -- -- 6,5 0,1 50,0 0,17
ARG 102 0,53 6 2 6 4,7 0,7 36,2 0,33 CHL 28 0,34 8 6 5 6,3 0,2 20,0 0,62 COL 79 0,49 7 2 9 6,0 0,3 57,7 0,14 MEX 43 0,41 8 5 5 6,0 0,3 63,2 0,14
CHN 94 0,52 10 1 4 5,0 0,6 31,5 0,43 RUS 97 0,52 7 2 7 5,3 0,5 28,7 0,47 IND 134 0,62 7 4 7 6,0 0,3 13,0 0,77
ZAF 29 0,35 8 8 8 8,0 0,1 34,4 0,37 TUR 91 0,51 8 4 4 5,3 0,5 9,8 0,79 CZE 52 0,44 2 5 8 5,0 0,6 18,5 0,65
AUS 8 0,16 8 2 7 5,7 0,3 79,7 0,06 DEU 21 0,31 5 5 5 5,0 0,6 53,1 0,16 KOR 23 0,32 7 2 7 5,3 0,5 81,8 0,06
Closing a BusinessProtecting Investors
Recte Rempublican Gerere Gerindo a coisa pública corretamenteGood Management of the Public Good
1) Understanding DB
Brazil fares poorly in items involving red tape
While employment regulations are typically national, licensing and registring regulations are local
BRA ARG CHL COL MEX CHN RUS IND ZAF TUR PHL BGR CZEStarting a business 0,56 0,54 0,27 0,47 0,37 0,60 0,27 0,47 0,36 0,35 0,55 0,46 0,42
Dealing with Licenses 0,69 0,63 0,32 0,41 0,26 0,73 0,80 0,75 0,34 0,71 0,60 0,69 0,60Registring Property 0,61 0,46 0,27 0,38 0,47 0,21 0,33 0,57 0,45 0,37 0,53 0,43 0,40
Employment Rigidity 0,48 0,61 0,35 0,41 0,50 0,41 0,43 0,51 0,43 0,65 0,53 0,48 0,29
Recte Rempublican Gerere Gerindo a coisa pública corretamenteGood Management of the Public Good
2) How can Doing Business help: picking priorities
Improvements in any of the start/license/register items would deliver important improvements to business conditions (and hopefully move Brazil up in the DB ranking)
Code RANK Percent.
Proced- ures
numberTime (days)
Ease of starting a business percent.
Proced- ures
numberTime (days)
Cost (% of
income per
capita)
Ease of dealing
with licenses percent.
Proced- ures
numberTime (days)
Ease registerproperty percent.
BRA 121 0,58 17 152 0,56 19 460 180% 0,69 14 47 0,61
BRA* 109 0,55 6 40 0,26 19 460 180% 0,69 14 47 0,61
BRA* 109 0,55 17 152 0,56 10 160 180% 0,31 14 47 0,61
BRA* 109 0,54 17 152 0,56 10 160 100% 0,27 14 47 0,61
BRA* 109 0,55 17 152 0,56 19 460 180% 0,69 5 30 0,30
Dealing with LicensesStarting a Business Registering Property
Recte Rempublican Gerere Gerindo a coisa pública corretamenteGood Management of the Public Good
2) Picking priorities Reductions in steps and delays would bring BRA closer to peer countries
Code RANK Percent.
Proced- ures
numberTime
(days)
Cost (% of
income per
capita)
Min. capital (% of
income per
capita)
Ease of starting a business percent.
Proced- ures
numberTime
(days)
Cost (% of
income per
capita)
Ease of dealing
with licenses percent.
Proced- ures
numberTime
(days)
Cost (% of
property value)
Ease registerproperty
percent.BRA 121 0,58 17 152 10% 0% 0,56 19 460 180% 0,69 14 47 4,03 0,61 BRA* 109 0,55 6 40 10% 0% 0,26 19 460 180% 0,69 14 47 4,03 0,61 BRA* 109 0,55 17 152 10% 0% 0,56 10 160 180% 0,31 14 47 4,03 0,61 BRA* 109 0,54 17 152 10% 0% 0,56 10 160 100% 0,27 14 47 4,03 0,61 BRA* 109 0,55 17 152 10% 0% 0,56 19 460 180% 0,69 5 30 4,03 0,30
ARG 102 0,53 15 32 12% 6% 0,54 23 288 46% 0,63 5 44 8,32 0,46CHL 28 0,33 9 27 10% 0% 0,27 12 171 114% 0,32 6 31 1,30 0,27COL 79 0,49 13 44 20% 0% 0,47 12 150 646% 0,41 7 23 3,48 0,38MEX 43 0,41 8 27 14% 13% 0,37 12 142 105% 0,26 5 74 5,24 0,47
CHN 94 0,52 13 35 9% 213% 0,60 29 367 84% 0,73 3 32 3,10 0,21RUS 97 0,52 7 28 3% 3% 0,27 22 531 275% 0,80 6 52 0,30 0,33IND 134 0,62 11 35 74% 0% 0,47 20 270 606% 0,75 6 62 7,80 0,57ZAF 29 0,35 9 35 7% 0% 0,36 17 174 33% 0,34 6 23 8,91 0,45
TUR 92 0,51 8 9 27% 19% 0,35 32 232 150% 0,71 8 9 3,20 0,37PHL 126 0,60 11 48 19% 2% 0,55 23 197 113% 0,60 8 33 5,74 0,53BGR 55 0,44 9 32 8% 91% 0,46 22 226 270% 0,69 9 19 2,32 0,43CZE 52 0,44 10 24 9% 37% 0,42 31 271 15% 0,60 4 123 3,01 0,40
AUS 8 0,16 2 2 2% 0% 0,02 17 140 14% 0,25 5 5 4,84 0,24DEU 21 0,31 9 24 5% 46% 0,38 11 133 89% 0,20 4 40 4,53 0,32ESP 38 0,38 10 47 16% 15% 0,52 11 277 66% 0,38 3 17 7,15 0,29KOR 23 0,32 12 22 15% 300% 0,57 14 52 176% 0,24 7 11 6,32 0,44
Registering PropertyStarting a Business Dealing with Licenses
Recte Rempublican Gerere Gerindo a coisa pública corretamenteGood Management of the Public Good
2) Picking prioritiesAddressing all formalities complexity together would deliver strong results
Protec. Invest Closing
Country RANK percent. # procedTime (days)
Index Starting # proced
Time (days)
Index License # proced
Time (days)
Coef. Invest. Protec.
Recov. Rate (c/$)
BRA 121 0,58 17 152 0,56 19 460 0,69 14 47 5 12,09
BRA 79 0,49 6 40 0,26 10 160 0,31 5 30 5 12,09
BRA 50 0,43 6 40 0,26 10 160 0,31 5 30 7 20,00
BRA 48 0,42 6 40 0,26 10 160 0,31 5 30 7 30,00
Starting a Business Dealing with Licenses Regist. Propr.
Reducing the hurdles to start a business, deal with licenses and register property could put Brazil among the 80 easiest countries to do business;
If the “investor protection” and “recovery rate” indexes are aligned, addressing these areas together would put Brazil among the 50 easieast countries to do business.
Recte Rempublican Gerere Gerindo a coisa pública corretamenteGood Management of the Public Good
3) How can Doing Business help: finding agents of change
Main players in the Estado do Rio de Janeiro:
• Registering Office (Junta Comercial) at the Economic & Development Secretary
• Notaries and the Judicial System
• Federal Government (Federal Revenue Service in particular) and Municipalities
• Multilateral Institutions and the Private Sector
Recte Rempublican Gerere Gerindo a coisa pública corretamenteGood Management of the Public Good
3) Agents of change
Junta Comercial: Art. 43 of Law Nº 8.934, of Nov/18/1994 establishes the maximum period of 10 working days for registring complex cases and 3 days for registring the simple ones.
State Creation Change Closing TotalSão Paulo 9.173 22.084 1.765 33.022
Minas Gerais 4.625 12.145 1.430 18.200
Paraná 3.886 5.932 1.157 10.975Sul 4.116 4.976 1.567 10.659
Rio de Janeiro 2.383 5.160 627 8.170
Santa Catarina 2.398 3.588 602 6.588
Bahia 2.886 3.254 359 6.499
Federal 883 1.869 363 3.115
Pernambuco 1.368 1.524 200 3.092
BRAZIL 42.285 73.709 10.349 126.343
42,285 companies were created and 10,349 closed in Brazil in Jan-March 2007
Recte Rempublican Gerere Gerindo a coisa pública corretamenteGood Management of the Public Good
4) How can Doing Business help: what has been done since the beginning of 2007
“Cadastro Único”:
• Joint program with Federal Revenue to provide one single registration number at federal, state, and municipal levels: protocol signed on January 19, 2007
• System will save time, by eliminating the back and forth between the Registering Office (Junta), the State Finance Secretary and the Federal Revenue, which can take two weeks or more: by exchanging information, all the required checks will be done at once and applicant promptly oriented as needed.
Recte Rempublican Gerere Gerindo a coisa pública corretamenteGood Management of the Public Good
4) What has been done since the beginning of 2007
Improving the “Paying Taxes” component:
• Acceleration of judgment of administrative tax disputes, with full staffing of and new resources to Taxpayer Tribunals (Conselho de Contribuintes e Junta de Revisão Fiscal)
• Close cooperation with General Attorney and Courts, to accelerate the resolution of judicial disputes and the payment of court decisions against the government (precatorios)
• Creation of specialized sectoral tax offices
• Preparation of public admission contest (“concurso”) for 70 tax auditors before year end
• Considering reducing VAT surtax on Electricity and Telecomm
Recte Rempublican Gerere Gerindo a coisa pública corretamenteGood Management of the Public Good
4) What has been done since the beginning of 2007
Making registration of real estate simpler: This reform, although not directed to the business sector, shows what can be done to simplify life and reduce waste:
•As of January 2007, the registration of changes in real estate ownership was exempt from being cleared by courts in the case offriendly divorces or inheritances;
• Regulation on how to assess the property value and apply to taxpayments before going to the notary was issued the Secretary of Finance and the State General Attorney in a matter of days;
•Integration with municipal databanks to automate property value assessments, currently under way, is likely to cut the time to register property in the state capital (Rio) to just a few weeks.
Recte Rempublican Gerere Gerindo a coisa pública corretamenteGood Management of the Public Good
4) What is next
Resume investments and energize partners:
• The “Cadastro Único” will require financial and human resources to be implemented quickly: approaching BNDES
• A team of IT experts has been put in place and is working with consultants to review most practices at the General Revenue Office and close gaps existing in the IT area (as indicated alsoby the External Auditing State Office –TCE)
• Conversations have begun with the World Bank Brazilian team to help the Junta Comercial and to find additional resources and select projects focused on reducing steps and the time required to open/close/change companies
34
Thank You
Niterói Campos Costa Verde
Teresópolis
Recte Rempublican GerereGerindo a coisa pública corretamenteGood Management of the Public Good
35
Rio de Janeiro, the most pleasant place to work
Recte Rempublican GerereGerindo a coisa pública corretamenteGood Management of the Public Good