Brazil’s Ceará State will get $80 million from the Inter-American Development Bank to overhaul its tax collection and budget systems, according to an Inter-American Development Bank (IDB) announcement. The loan supports the third phase of the PROFISCO Program, which helps Brazilian states modernize their financial management ahead of Brazil’s new value-added tax rollout. The state plans to upgrade everything from tax collection software to citizen services. The program aims to boost tax compliance and make it easier for businesses to pay what they owe. Ceará will also add $8 million of its own money to the project.
Brazil is preparing for major tax reform that will change how states collect revenue. The new VAT system requires states to upgrade their technology and train staff on different rules. PROFISCO has been helping multiple Brazilian states get ready for these changes by modernizing their tax authorities and budget processes.
The money will go toward new computer systems for tax collection, debt management, audits, and taxpayer services. Ceará also plans to build a data analytics platform and automate cash flow tracking. The state will restructure its internal controls and launch a tax education program to help people understand the new rules. On the spending side, budget and financial management systems will get major upgrades to improve oversight of public money.
Businesses should find it easier to pay taxes once the new systems are running. Citizens will get better access to information about how the state spends their money. The state’s treasury department will also get better tools and training for its workers.
The IDB loan runs for 24.5 years with a six-year grace period and interest rates based on the Secured Overnight Financing Rate.
