Coordination of the Fiscal Modernization Programme of the Brazilian States (PNAFE))

Project BRA/97/032 -- Start Year: 1997; Approved Budget: US$ ; End Year: 2002 Implementing Agent: NEX (National Execution Related Projects); Executing Agent: Ministry of Finance Related projects: BRA/97/001, BRA/98/013

Project background and rationale: The Fiscal Modernization Programme of the Brazilian States (PNAFE) was conceived to promote the restructuring, modernization and institutional strengthening of the bodies responsible for fiscal management in the Brazilian States, both on the income administration and on the public expenditure management sides. Moreover, this fiscal reform coordination aims at reducing the existent disparities between the different tributary and financial administrations of the States composing the Federation and to create the basis for their integration in order to grant better assistance to the least developed state administrations and, hence, contribute to the improvement of the functioning of the Brazilian fiscal federalism through increased homogenization. The PNAFE comprises two main elements:

1. Technical Assistance and Coordination aimed in particular at the improvement of the performance of the Ministry of Finance in its functions of supervisor and coordinator of the national federal system;

2. Modernization of the Fiscal Administration system of the States composing the Federation. This project is related to 15 other separate projects operating at State level.

Project development goal: The main goal of this project is to rationalize public resources administration and to increase its efficiency and transparency.

Project immediate objectives and expected outputs: To attain this objective, the project foresees to grant assistance to specific projects of fiscal modernization aimed at:

1. Refining the legal, operational, administrative and technological mechanisms used by the bodies responsible for the fiscal administration;

2. Strengthening and integrating the finance administration and consolidating audit mechanisms and internal control in the States members of the Federation;

3. Improving the control over the fulfillment of tributary duties, through the establishment of new techniques and methodologies of tax collection; and

4. Easing coercive tax collection of tributary debt and strengthening the integration process among tributary administrations and bodies of judicial tax collection

Contact details: Unidade de Coordenação de Projetos - UCP, Ministério da Fazenda, Ed. SEDE 4° andar sala 413, 70048-900 Brasília, DF Brazil, Phone: (55 61) 412 2461, E-mail: acs@fazenda.gov.br