CENTRAL GOVERNMENT OPERATIONS

Contact Person

1. Cleber Ubiratan de Oliveira
2. Luiz Gonzaga de Queiróz Filho
    

Organization

1. Ministério da Fazenda, Secretaria do Tesouro Nacional, Secretaria Geral de Estudos Econômicos e Fiscais
   Esplanada dos Ministérios, Bloco P, 3^º andar
   Brasília (DF) - Brasil
   CEP 70.048-900
   
2. Banco Central do Brasil, Departamento Econômico, Divisão de Finanças Públicas
   SBS Qd.3, Ed. Sede, Bl. B,  10^º andar
   Brasília (DF) - Brasil
   CEP 70.074-900

Phone Number

1. 55 61 3412-2203
2. 55 61 3414-1075

Fax Number

1. 55 61 3412-1700
2. 55 61 3414-2036

E-mail

1. cesef.df.stn@fazenda.gov.br
2. difin.depec@bcb.gov.br

Coverage characteristics

Data are disseminated on the following components: the revenues, the expenditures, the nominal result, the primary result, the financing, broken down into external financing and domestic financing. Data are calculated on a cash basis and interest is presented on an accrual basis.

Financing data cover the National Treasury and Social Security. These data are disseminated by residency. The primary result is consolidated and calculated on a cash basis and interest on an accrual basis.

The fiscal year is the same as the calendar year.

Periodicity

Timeliness

Advance dissemination of release calendar

Simultaneous release to all interested parties

The "below-the-line" criteria data are published in the Central Bank Press Release and in the Central Bank Bulletin, and are immediately available to all interested parties at the Central Bank's website on the Internet (http://www.bcb.gov.br/?FISCPOLICY). These documents are also available at the Central Bank's library.

Dissemination of terms and conditions under which official statistics are produced, including those relating to confidentiality of individual responses

The Central Bank of Brazil compiles and publishes monetary and financial statistics pursuant to the legislation in force, specifically the Law establishing the Central Bank (Law Nr. 4595 of Dec. 31st, 1964) and the National Monetary Council resolutions, governing the generation and release of data and information, in particular with regard to the confidentiality of data.

The Central Bank guarantees the confidentiality of the data in observance of the established in Article 38 of the Law Nr. 4595.

The Law Nr. 4595, the National Monetary Council resolutions, and other rules issued by the Central Bank of Brazil, as well as other legislation, can be found in Portuguese on the Central Bank's Internet page:

http://www.bcb.gov.br/mPag.asp?cod=106&Perfil=1&codP=0

These laws are available to the public in Portuguese at the Internet page of the Presidency of the Republic, under search of decrees and laws

http://www.planalto.gov.br.

According to the Fiscal Responsibility Law (Law Nr. 101, of 05//04/2000), the dissemination by the National Treasury and by the Central Bank of data herein established is mandatory and free of charge.

Identification of internal government access to data before release

Identification of ministerial commentary on the occasion of statistical releases

Provision of information about revision and advance notice of major changes in methodology

The Bulletin contains analyses and additional information aiming at providing a better understanding of the disseminated data.

Major changes in the calculation methodology of the below-the-line criteria will be published in the Central Bank Bulletin, accompanied by notes.

Dissemination of documentation on methodology and sources used in preparing statistics

Methodological comments on the "below-the-line" criteria data are presented as explanatory notes in the Central Bank Bulletin and on the Internet. Technical notes describing the methodology used to compile data are published in several editions of that Bulletin as well as information on the comparability of statistical series.

Dissemination of component detail, reconcilliations with related data, and statistical frameworks that support statistical cross-checks and provide assurance of reasonableness

The data on central government borrowing requirements, compiled by the Central Bank, is based on changes in net debt, including domestic and external financing sources, permitting a certain degree of comparison with the corresponding "above-the-line" criteria data, compiled by the National Treasury Secretariat.

By definition, the two methods should provide the same results, i.e., the financing of the deficit should be equal to the deficit itself. However, in practice, this would only be the possible, if the coverage of the two segments was identical, and also if the accounting criterions for the figures involved were compatible. The criterions for both are already in the process of converging.

The time series published by the Central Bank and by the National Treasury Secretariat cover the reference period of one month for the central government operations (above and below-the-line).

Notes

1. The "above-the- line" criteria data will be published in the bulletin named "Resultado do Tesouro Nacional", by the Ministry of Finance. These data are available for free in Portuguese. Copies can be obtained at the National Treasury Secretariat (Ministry of Finance).
2. The Central Bank Bulletin includes the "below- the-line" criteria data and is available in Portuguese and in English. A subscription can be requested:

DEMAP/DISUP/SUIMP
SIG - Quadra 8 – Lote 2025
70610-400 Brasilia (DF) - Brasil
Telephone 55 61 3344-1554
Fax 55 61 3344-2982

e-mail: demap.disup@bcb.gov.br

The cost is R$ 19.05 per issue.

1. The Ministry of Finance (above-the-line criterion data):

http://www.tesouro.fazenda.gov.br

2. The Central Bank of Brazil (below-the-line criterion data):

http://www.bcb.gov.br/?FISCPOLICY

The calculation methodology of the central government borrowing requirements (NFGC), according to the "above- the-line" criteria, meets the IMF Manual on Government Finance Statistics recommendations and is consistent with the "below-the-line" criteria used by the Central Bank, which considers realized income as effectively received by the economic agents and realized expenditures at the effective disbursement (cash basis).

Definitions for the above the line criteria data:

TOTAL REVENUES – is the sum of the total primary revenues collected by the Federal Government and divided into two categories: National Treasury and Social Security. The revenue of the National Treasury, which stems from the sale of stocks, where the government is the major shareholder, is not considered a primary revenue; the same happens to the Central Bank´s operations.

NATIONAL TREASURY REVENUES – are the gross revenues of the National Treasury, after the deduction of tax breaks and restitutions. They cover the direct administration, funds, autarchies and foundations collection, which are consigned in the General Federal Government Budget, as well as the revenues which stem from concessions or from the rental or leasing of public assets.

The gross revenues concept is used to express the gross amount, which results from the collection of taxes, contributions, fines and duties, as well as other federal government´s para-fiscal revenues, i.e., concessions, tariffs, rentals and shareholder´s stock revenues.

The gross revenues consign the following: taxes on imports, taxes on exports, income taxes, taxes on financial operations, taxes on industrialized products and on rural property. The contributions are the following: PIS/Pasep, contributio to financing of the Social Security (COFINS), financial transactions tax (IOF), social contribution on clear gain (CSLL), public servants social security contribution (CSSP), the family agriculture fund (FUNDAF), the contribution of the education salary and the contribution on the revenue of the prognosis contest. The taxes and social contributions – except for the education salary – are practically the total administered revenue of the National Treasury Secretariat. Their collection is done through the payment of certificates of collection (DARFs) received and operationalized by the authorized banking network, which has two business days to transfer the money to the National Treasury´s single account.

OTHER REVENUES – stem from the petroleum account of the Treasury at Petrobrás, dividends on earnings from state-owned enterprises, concessions of public services and rental of public assets, as well as other revenues, under the heading "others", which include other federal government´s para-fiscal revenues, i.e., concessions, tariffs and rentals. A share of these revenues are directly collected by direct administration entities, funds, foundations and autarchies.

The "other revenues" are collected through the payment of certificates of collection (DARFs) and are considered non-administered revenues by the National Treasury Secretariat.

Tax restitutions and tax breaks – the refund of those tax payments made in excess to the taxpayer is considered a tax restitution. The most significant amount of tax restitutions stems from the income tax and is refunded after its calculation, according to the reference year, by the National Revenue Secretariat (Secretaria da Receita Federal).

Tax breaks result from the legal entity decision of investing parcel of the amount of the income tax owed in the Northern and Northeast regions and Espírito Santo State investment funds.

SOCIAL SECURITY REVENUES - stem from the collection of the contributions made by the private sector employees to the general social security system (INSS), through the payment of social security certificates of collection to the National Treasury single account, which are received and operationalized by the authorized banking network. The "Simples" system contributions, as well as other social security revenues (for example: rentals) are included in the heading "Social Security Revenues".

Restitutions and transfers to third parties (SENAC, SESI, SESC, FNDE, and others) have already been deducted from "Social Security Revenues".

Note: Until September, 1998, the general social security system (INSS) contributions were not collected to the National Treasury single account. Its inclusion aimed at avoiding the systematic financing of the INSS operations by the banking sector. In addition, the government created a mechanism which permitted the financing of the INSS cash shortfalls by the National Treasury with the required agility and at lower costs.

TRANSFERS TO STATES AND MUNICIPALITIES – comprises constitutional transfers, transfers resulting from the Supplementary Law Nr.87/96 and other transfers.

The constitutional transfers stem from income tax and tax on industrialized products (IPI) collected by the federal government, which are transferred to states and municipalities through the following funds:

1. states fund (Fundo de Participação dos Estados – FPE): 21,5% of the income tax and 21,5% of the IPI;
2. municipalities fund (Fundo de Participação dos Municípios – FPM): 23,5% of the income tax and 23,5% of the IPI;
3. constitutional fund for compensation of industrialized products exports (Fundo Constitucional de Compensação pela Exportação de Produtos Industrializados): 10% of the IPI.

The transfers resulting from the Supplementary Law Nr.87/96 aim at compensating the value-added tax revenue losses (ICMS) of the states. According to this law, the export of primary and semi-industrialized goods, as well as the acquisition of capital goods, are exempt from the value added tax (ICMS), which is the main source of revenues of the states.

The "other transfers" refer to the transfer of the revenues resulting from: the financial operations tax on gold (30% to the states and 70% to the municipalities), the rural property tax (50% to the municipalities), the education salary (2/3 to the states), the royalties paid by the Itaipu, Petrobras (under the Law Nr.9.478/97), the federal government transfers to Fundeb (education fund), as well as the voluntary transfers resulting from accords.

TOTAL NET REVENUES – are the total net revenue collected by the federal administration, which is available to finance administrative costs and expenditures, government activities and the fiscal policy execution. It is also the gross revenue of the central government, after the deduction of restitutions, tax breaks and transfers to states and municipalities.

TOTAL EXPENDITURES – are the total primary expenditures of the federal administration, in terms of cash basis, corresponding to the sum of the total banking orders issued by the federal government organs derived from personnel expenditures, operating and capital expenditures, as well as investments. Interest, loans and financial expenditures are not included.

Only a small share of the National Treasury´s expenditures (registered at the statistics series "National Treasury´s financial execution", which is the National Treasury´s cash flow) corresponds to the effective outlays, like agriculture equalizing expenditures paid to the Banco do Brasil or the transfers of states and municipalities funds. The operating and capital expenditures refer only to the transfers of the National Secretary to other federation units, but the effective expenditures (this criteria is the same used in the calculation of the borrowing requirements) will occur in the next day after the issue of the banking orders by the direct administration organs, funds and autarchies, debiting the National Treasury single account.

PERSONNEL EXPENDITURES – are the sum of the amounts of banking orders issued for the payment of personnel and social charges of the direct administration, funds, autarchies and foundations, as well as part of the personnel expenditures of the Federal District government and those of the former territories.

SOCIAL SECURITY BENEFITS – is the payment of benefits to retired employees, pensionists and other beneficiaries of the general social security system by the National Treasury.

OPERATING AND CAPITAL EXPENDITURES – are those primary expenditures of the federal public administration as a consequence of the implementation of government policies.

EXPENDITURES OF THE WORKERS AID FUND (FAT) – are the transfers of the fund´s resources to the official banks for the payment of labor charges to the private sector workers. It also includes banking services and training expenditures with the National Employment System (SINE).

SUBSIDIES – are the equalizing interest rates and administrative expenditures related to financial institutions loans to farming and exports sectors. The equalizing interest rates stem from the difference between the funding and lending costs of the financial institutions. In the case of the farming debts securitized by the federal government, the equalizing interest rates are the difference between the interests paid by the federal government to the financial institutions and those paid by the farmers to the National Treasury.

Net expenditures with the selling and purchase of farming products are also included, with the aim of regulating the minimum price of these assets. Finally, under this heading are also included implicit subsidies to farming and industrial sectors, as well as administrative expenditures paid by the regional funds (FCO, FNO, FNE). The implicit subsidies are considered to be the opportunity cost for those funds to use their resources in financing the two sectors, considering the potential rate of return of the financial institutions.

OTHER EXPENDITURES – the set of other primary expenditures of the federal public administration. It also includes those consigned in the Federal Government General Budget and those referring to the previous fiscal year, under the heading "outstanding commitments".

PRIMARY RESULT OF THE FEDERAL (or CENTRAL*) GOVERNMENT – is the difference between the primary revenues and expenditures of the National Treasury and the general social security system. The result of the general social security system is the difference between the Social Security revenues and the expenditures with the payment of benefits to the private sector.

NET NOMINAL INTERESTS - are interests on the net public debt, calculated on accrual basis.

CENTRAL GOVERNMENT OPERATIONS - are the nominal results, which corresponds to the primary result plus the net nominal interests.

PRIMARY RESULT OF THE CENTRAL BANK - the monthly flows result from the difference between the Central Bank operational revenues and its administrative expenditures. The result of the other operations of the Central Bank are included in the "net expenditures with nominal interests of the Central Bank", therefore being part of the nominal result, calculated by the Central Bank, based on the net debt stock.

* according to the SDDS requirements, the Central Bank of Brazil Operations must be excluded from the Central Government Operations.

In terms of expenditures, the stages of budgetary and financial execution are as follows: preparation of the budgetary proposal, enactment and publication of the Annual Budgetary Law, bidding, performance, production of goods or services by contractors, settlement, and effective disbursement.

Expenditure commitments refer to the allocation of a share of the budget to a given expenditure, with prior indication of the creditor and of the amount. The settlement consists of the recognition that the expenditure was executed as agreed, and represents acknowledgment of the debt as net and accurate. This is the last stage of budgetary execution of the expenditure. The next and final step is the disbursement, which is carried out when the subject incurring in the expenditure issues a bank order in favor of the creditor. It should be pointed out that the expenditure is recorded in the accounting books at the time of the settlement, therefore the executed amount, as shown in the books, does not correspond exactly to the disbursed amount, because in certain situations there is a time lag between the settlement and the effective disbursement, due to cash shortfalls.

Considering that the settlement of an expenditure represents the acknowledgment that it has been properly executed, as well as the right of the creditor to receive the agreed amount, it can be inferred that this is a good criterion for valuing the expenditure. However, given the time lag between the recording and the payment of the settlement, specially when recording the due result, this method of determination also leads to discrepancies between the "above-the-line" criteria fiscal result, calculated by the Ministry of Finance, and the Central Bank’s "below-the-line" criteria figures.

The problem stems from the fact that the calculation of the result by the Central Bank takes into account the activity in the National Treasury´s single account. Thus, the expenditure is considered only when the Treasury account is effectively debited.

In the case of financing, nominal interests are appropriated on accrual basis.

This mechanism, introduced in January 1998, consists of a data-processing program that makes a daily "survey research" on all the bank orders issued within the SIAFI, as well as any withdrawals from the single account ordered by the STN. Using the issued orders as indicators, as well as the data provided for accounting classification purposes, the expenditure group and other information can be accurately specified.

The SIAFI system also provides information on the amount of revenues, breaking them down by type or denomination. However, the main revenues data are collected through the administrative entity, i.e., the Secretariat of Federal Revenue. Other, non-budgeted revenues, are reported by the entities involved it their collection.

Data on financing are obtained from financial system and Central Bank's accounts information, from the balance of payments, from the Special Settlement and Custody System (SELIC ) and from the Custody and Liquidation Chamber (CETIP).