(MENAFN - The Rio Times) Governor Tarcísio de Freitas is launching a transformative plan to save São Paulo up to R$20 billion ($3.88 billion) annually.
This ambitious initiative aims to slash public spending, boost investments, and enhance the business environment.
Central to the plan is the overhaul of tax incentives for businesses, currently totaling around R$60 billion ($11.65 billion).
The revised tax policies could generate an additional R$15 billion to R$20 billion ($2.91 billion to $3.88 billion) per year.
This significant increase will come from revoking benefits that don't drive investments, create jobs, or enhance competitiveness.
Already, one-third of expired benefits in April were not renewed, adding R$400 million ($77.67 million) to the state's coffers annually.
The plan also focuses on renegotiating the state's debt with the Union, aiming to change the index from IPCA plus 4% to IPCA plus 2% per year.
This renegotiation could save São Paulo R$4 billion ($776.70 million) each year. The“São Paulo in the Right Direction” plan will be published on May 23rd in the Official Gazette.
It includes measures such as personnel expense reviews, the elimination of certain public agencies, and cost-cutting on travel and rentals.
Secretariats have 90 days to develop comprehensive proposals, while the São Paulo Legislative Assembly (Alesp) will need to approve some changes.
Strengthening São Paulo's Fiscal Framework
The plan excludes public universities (USP, Unicamp, and Unesp) and FAPESP , targeting all other state agencies. These institutions' effective operational mechanisms exclude them.
Earlier administrative reforms have already cut 20% of commissioned positions, with further reductions expected.
Governor Tarcísio also plans to restructure regulatory agencies to ensure independent management and attract top talent through technical criteria for leadership selection.
The plan includes expanding tax transaction programs to resolve disputes and increase revenue.
The existing Paulista Agreement has renegotiated R$14.6 billion ($2.84 billion) in ICMS debts, with R$2.3 billion ($446.60 million) already received.
Additional measures involve selling state-owned properties, anticipating government credits, and using ICMS credits and precatory claims for debt payment.
This comprehensive approach aims to secure São Paulo 's financial stability and drive economic growth.