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Brazil will contribute to the fiscal sustainability of the State of Bahia

IDB loan for $40 million will modernize fiscal management, tax administration and public expenditure management 

The State of Bahia in Brazil will contribute to fiscal sustainability with the management of public and tax expenditures with a loan of $40 million approved by the Inter-American Development Bank (IDB).

The program aims to improve management instruments and modernize the technology infrastructure that will include Big Data solutions, operations security center and the expansion of storage and processing capacity.

In addition, will increase the tax authority's transparency with society with an integrity and risk management program, a transparency portal, internal control and operational audits, enhancing the institutional performance of the Ministry of Finance of the State of Bahia.

It will seek to increase the efficiency of tax collection, increase revenues and simplify tax compliance. This will include the financing of the implementation of the National Network for the Simplification of the Registration and Legalization of Companies and Businesses (REDESIM) and the simplification of the fulfillment of the accessory obligations related to the Tax on the Circulation of Goods and on the Provision of Inter-municipal Transport Services and of Communication (ICMS) through the elimination of some monthly declarations required from the taxpayer.

Likewise, in the area of ​​fiscal discipline and the increase in the efficiency and effectiveness of public spending, econometric model processes will be mapped and reviewed to develop scenarios and new functionalities for the Integrated System of Planning, Accounting and Finance of the State of Bahia (FIPLAN). System of management of judicial orders for payment and requisition of small securities will also be integrated into the FIPLAN and the State Attorney General's systems.
 
The IDB loan of $40 million has a repayment term of 25 years, a grace period of five and a half years, an interest rate based on LIBOR, and has a local counterpart of $4.5 million.

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The Inter-American Development Bank is devoted to improving lives. Established in 1959, the IDB is a leading source of long-term financing for economic, social and institutional development in Latin America and the Caribbean. The IDB also conducts cutting-edge research and provides policy advice, technical assistance and training to public and private sector clients throughout the region.

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Patricia Bakaj
IDB Project Team Leader
patriciagb@iadb.org