Under the guise of Social Security, the government is "gifting" R$ 201 billion to businesses.
Over the past five years, tax breaks granted by the government to businesses have removed more than R$ 201 billion from the Social Security coffers. Reforming to ensure the system's sustainability is very different from dismantling it.
Governments come and go, and it's always the same old story, the same old nonsense about Brazilian Social Security being in deficit, generating losses, and representing a major problem for the country's future. However, government agencies fail to disclose that one of the biggest shortfalls in Social Security is caused by mismanagement of resources and is the result of absurd measures, such as tax breaks.
Tax breaks are government measures that exempt or lower social security contributions for certain productive sectors in commerce and industry, with the aim of stimulating production and securing jobs during times of crisis. However, in practice, only business owners benefit, as they stop contributing to social security and continue to gradually lay off workers. In other words, in the end, tax breaks increase business profits, do not generate jobs, and the Brazilian people, who are linked to social security, are the ones who pay the price.
To get an idea of the financial hole that governments have created with tax breaks, according to the Federal Revenue Service, in the last 5 years, from 2001 to 2015, R$ 201,11 billion failed to enter the Social Security coffers. With corporate tax breaks on social security contributions, as always happens throughout history, the government is being generous with the Brazilian people's money and their pension funds.
"Every government official, faced with a crisis, economic stagnation, and a lack of funds for investment, ends up using Social Security resources," highlighted Carlos Ortiz, president of the National Union of Retirees.
Clearly, with the aging population, some aspects of Social Security need to be reformed; however, reforming to ensure its sustainability is very different from dismantling it.
Governments will continue to repeat the same old story that Social Security, if not reformed, threatens the country's economic future, but who actually creates the deficit? Who benefits from the "reform" of Social Security in the form proposed by the government?
* This is an opinion article, the responsibility of the author, and does not reflect the opinion of Brasil 247.