Treasury Secretary defends demand for more dividends and denies pedaling

The Secretary of the National Treasury, Paulo Valle, denied this Thursday (28) that the government’s request to the main federal state-owned companies for more dividends represents a pedal. According to him, the request is defensible and respects corporate governance rules.

The government has asked Petrobras, BNDES, Banco do Brasil and Caixa Econômica Federal to change their dividend payment practices so that the Treasury can receive more revenue this year.

The request is part of an attempt to neutralize this year the effects of the constitutional amendment that released R$ 41.25 billion on the eve of the election and the tax waivers resulting from the exemption of fuel.

“I heard that this operation of asking for advance payment of dividends is similar to pedaling. We strongly refute this. It is a normal operation, an operation that is in line with the improvements in governance management practices of state-owned companies”, he said.

For Valle, the initiative, which generated negative reactions after the government’s request was released, was misinterpreted and the anticipation will not withdraw revenue from 2023.

Changing payments from semi-annual to quarterly generates the effect of “pulling” funds from the third quarter of this year to 2022, which would be deposited to the Treasury only next year if current rules on the part of companies are considered. On the other hand, the Treasury claims that the amendment would also allow it to pull resources that would be paid in 2024 (and so on) to 2023.

In any case, the change guarantees resources in 2022 amid a good moment for state-owned companies that would, in part, only be harvested next year — when a series of factors, including the possible worsening of the global macroeconomic scenario, may limit the access to this type of income. In addition, experts say that the measure does not generate new revenue — not, in fact, covering the hole created by recent initiatives that increased expenses and cut taxes.

“The objective is to reduce public debt, it is a market practice. The version that it is trying to increase revenues to the detriment of future years is not valid. It is a very defensible practice”, he added.

“It is common for these companies to have a reserve, and we consult if they are considering it for investment, if it is necessary to follow the Basel requirements [indicador de solvência dos bancos]”, he stated.

The government believes that it is ideal to seek more revenue to mitigate the impact of measures this year that boosted social benefits, although it is not obliged to compensate for these expenses.

The amendment on the subject enacted this year had already exempted resources from complying with the main rules on public accounts – such as the fiscal target (result of revenues minus expenses to be pursued by the government), the spending ceiling (which prevents real growth of federal expenditures) and the need for budgetary offsets.

This month, the Ministry of Economy reduced the projection of deficit in public accounts and considers it possible that the improvement will continue to the point that the year ends with a slight surplus in the primary result (which excludes the interest-bearing account).

The first positive balance after eight years can be seen in the midst of a significant increase in collections, but it is also achieved with the help of temporary maneuvers and revenues.

In the first half, the government achieved a surplus of R$ 53.6 billion with the help of atypical revenues — such as the one resulting from the Eletrobras sale process (R$ 26.5 billion) and the receipt of dividends from BNDES from previous years (R$ 18.9 billion).

The search for more revenue in the form of dividends also coincides with the approach of the electoral campaign. The need to eliminate the deficit in public accounts in the first year of management was expressed in 2018 in the government plan of then-presidential candidate Jair Bolsonaro (PL), but Minister Paulo Guedes (Economy) reached the last year of his term without obtaining the done — with the task compromised, above all, by the extraordinary effects of the pandemic.

According to Valle, three of the four state-owned companies have already responded to the letter sent by the government. In addition to Banco do Brasil, which had said it would not have room for anticipation and additional dividends to be paid, Petrobras informed that it will follow the dividend payment policy, which was already quarterly, without additional revenue.

In the case of Caixa, the statute allows a distribution of up to 50% of the profit, and today the transfer is 25%, the amount of dividend that can be paid is being negotiated. As shown by Sheet, the idea in the bank is to reach this maximum amount.​

The BNDES, in turn, has not yet responded to the Ministry of Economy’s request, but it can, according to its statute, pay on a quarterly basis, according to the secretary. Sought by the report on Monday (25), the bank reported that the request was under analysis.

The secretary also commented that he was surprised by the decision of Minister Alexandre de Moraes, of the Federal Supreme Court (STF), to suspend the payment of installments of the public debt of Maranhão after a drop in ICMS (Tax on the Circulation of Goods and Services) ) as a result of the 17% to 18% cap on the tax rate on fuel, electricity, transport and telecommunications.

“This is an injunction, we are still evaluating with our legal department, AGU [Advocacia-Geral da União]. For me it was a surprise because the PEC rule [proposta de emenda à Constituição] only provides for compensation if the nominal loss of the states exceeds 5%”, he said.

According to Valle, Treasury reports do not indicate that there will be a fall. “We don’t see the probability of having a loss and, if there is a loss, there are few states,” he said.

The secretary also highlighted that the negotiation on ICMS between states and the Union will be discussed in a special commission, mediated by Minister Gilmar Mendes, of the STF, with a deadline until November 4th. The first meeting is scheduled for next Tuesday (2).

Regarding the risk of a suspension of payment of debts from other states, he stressed that Moraes’ decision is an injunction.