Brazil’s Maranhão State to Improve Fiscal Sustainability with IDB Support

WASHINGTON — The Board of Executive Directors of the Inter-American Development Bank (IDB) approved a $52.9 million loan for the state of Maranhão in Brazil to strengthen fiscal revenue and public expenditure management.

The operation will modernize Maranhão’s fiscal management by aligning systems and processes with the country’s consumption tax reform as well as enhance the state’s ability to deliver services and support sustainable economic and social development. This new plan is part of the third phase of the PROFISCO Program, a national IDB-supported initiative to strengthen fiscal sustainability at the subnational level in Brazil.

The program will finance measures to strengthen fiscal governance, modernize technology and operational processes, and build institutional capacity. It will improve cybersecurity, procurement and logistics, and promote transparency and fiscal citizenship, with a strong focus on inclusion. Additional measures will strengthen taxpayer registration, enforcement, and disputes resolution, improve budget and financial management, and reinforce systems to manage fiscal risks and recover public revenues.

These efforts are expected to facilitate tax compliance while increasing transparency and enabling higher-quality public spending and ultimately suport better public services for the population.

The loan has a 24-year maturity, a six-year grace period, and an interest rate based on SOFR. Counterpart financing totals $5.9 million.