Public finances and economic development of the Federal District

Abstract

This article discusses the budget and tax structure of the Federal District (DF), highlighting the importance of fiscal management for the region's economic development. As defined in the Federal Constitution, the budget structure of the DF and the other federal units is made up of the Fiscal Budget, the Social Security Budget and the Investment Budget of non-dependent state-owned companies. The current tax structure - which includes taxes such as ICMS, IPVA, IPTU, ISS, ITBI and ITCMD - is in the process of being replaced by a new structure that is being discussed by the Brazilian legislature. The reform will replace five taxes on consumption (PIS, COFINS, IPI, ICMS and ISS) with three new taxes: the Tax on Goods and Services (IBS), the Contribution on Goods and Services (CBS) and the Selective Tax. In the Federal District, this means that ICMS and ISS will be replaced by IBS, while PIS, COFINS and IPI will be unified in CBS. Efficient fiscal management, combined with public policies aimed at economic diversification and attracting investment, is essential for the sustainable development of the Federal District. The Federal District government must maintain transparency and efficiency in the management of public resources. To overcome the challenges of income inequality and fiscal sustainability, a collaborative approach with civil society and the private sector is needed to build a more inclusive and sustainable future, ensuring that the benefits of economic growth are widely shared.