The Board of Executive Directors of the Inter-American Development Bank (IDB) has approved a $53 million investment loan to improve revenue and expenditure management in the Brazilian state of Piauí, according to a press release. The financing forms part of the third phase of the IDB-backed PROFISCO program in Brazil. It is designed to modernize fiscal management in Piauí, strengthening fiscal sustainability and supporting the state’s alignment with Brazil’s consumption tax reform. The approval was announced from Washington. The initiative aims to bolster governance, transparency, and public sector performance across the state.
PROFISCO is an IDB-supported program in Brazil focused on fiscal modernization at the subnational level. The new operation in Piauí builds on this framework, extending its reach into its third phase. It responds to the demands generated by Brazil’s ongoing consumption tax reform. The state administration will be the direct counterpart in implementation. The project’s structure reflects priorities defined by the IDB and Brazilian authorities.
The project will improve public sector governance, planning, and transparency. It includes workforce training and fiscal education programs for the general population, modernization of digital infrastructure and cybersecurity, and expanded use of data analytics and artificial intelligence. In tax administration, it will improve revenue collection, update the taxpayer registry, modernize taxpayer services, and enhance oversight through digital tools and artificial intelligence. It will also support more effective budgeting, expenditure management, accounting, and tax-related legal processes. These measures aim to enhance fiscal health and improve public spending outcomes and the delivery of public services.
In addition, the project will strengthen the management and recovery of public debt, modernize legal processes, and enhance the management of fiscal and legal risks. It will also support more efficient handling of court-ordered payments and legal claims through digital tools and streamlined procedures. The main beneficiaries include taxpayers, who will benefit from improved systems and processes for meeting their tax obligations. The broader population of Piauí is also expected to benefit through greater fiscal transparency and more effective public policies. Improvements will span administrative, technological, and legal dimensions.
The IDB loan has a 24.5-year term, a six-year grace period, and an interest rate based on SOFR. Counterpart financing totals $5.3 million. Following approval by the IDB’s Board of Executive Directors, the program will move through the required Brazilian legal and administrative processes before implementation begins. The operation reinforces the IDB’s engagement with subnational fiscal modernization in Brazil. It positions Piauí to advance reforms in alignment with national priorities.
