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Brazil obtains US$500 million IDB credit line to improve State Fiscal Management

Brazil will get a conditional credit line of as much as US$500 million from the Inter-American Development Bank to finance its program to help states modernize and integrate their fiscal, financial and asset management systems. Ceará, in the country’s northeast, will be the first Brazilian state to benefit from the credit line.

The board of the IDB, the single biggest source of long-term lending in Latin America, approved the credit line in a meeting this week. The facility will help Brazil finance an ongoing program to implement digital bookkeeping and tax accounting, The program will integrate fiscal systems at both state and federal level, reducing administrative costs and streamlining economic transactions.

“Our credit line will allow the Brazilian tax system to become more effective,”  said Marcio Cracel, team leader for the IDB project. “Such investment will ultimately contribute for a better investment climate in the country.”

The credit line, which will be available for the Brazilian government for 10 years, will fund training, consulting services, reform and upgrading of operational and taxpayer service units, and the purchase of equipment such as information technology hardware, systems and materials.

Ceará will get a US$41 million loan from the credit line to increase usage of digital technology to inspect the transportation of goods across the state’s borders, airports, ports and postal triage centers. The loan, which will mature in 20 years and have a four-year grace period, will also finance the implementation of an electronic document and image center management and create centers that will integrate data to allow the government to increase supervision and reduce tax evasion.

The loan will also help the state integrate registry of taxpayers with the federal government’s database and another state agency and adopt an electronic tax invoice system and digital accounting procedures.

“The loan will help Ceará improve the efficiency and transparency of its fiscal management,” said Cracel. “The state will increase revenue; enhance the quality of public spending and provide better services to its citizens.”

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