The Finance Secretary of Silva Jardim explains how the new federal tax regime impacts fund transfers, puts pressure on local investments, and demands federal coordination and professionalization of public management.
Approved with the goal of reorganizing public accounts and ensuring greater predictability, the fiscal framework (Complementary Law Project 93/2023) replaced the old spending cap with a regime that links the growth of expenses to revenue performance and the achievement of primary surplus targets. In other words, the federal government can only increase its spending if there is a real increase in revenue. But, beyond the debate in Brasília, the effects of the framework are also felt at the grassroots level – especially in small municipalities, where revenue variations impact the provision of essential services. In Silva Jardim, in the metropolitan region of Rio de Janeiro, the topic is part of the daily routine of the Finance Department.
For Leandro Viana Antunes, a RenovaBR alumnus and current Finance Secretary of Silva Jardim, the impact is immediate. According to him, by restricting the growth of federal spending, the new regime puts pressure on federal transfers, which ultimately limits the investment capacity of municipalities. In practice, this requires a change in approach to local management.
“The new framework encourages municipalities to promote a culture of sustainable budgeting. It is not enough to focus solely on increasing revenue. It is also necessary to adjust the evolution of public spending, avoiding its uncontrolled growth, especially mandatory and ongoing expenses,” he states.
According to the secretary, for small municipalities, this reality requires consistent adjustments and continuous monitoring of actual revenues. Leandro explains that the scenario demands medium-term planning and constant evaluation of public accounts to guarantee fiscal sustainability without compromising the continuity of services.
Fiscal targets and essential services
While the framework establishes a direction for balancing public accounts, day-to-day municipal operations may face some additional challenges. According to the secretary, one of the difficulties is linked to decisions adopted at the federal level without provisions for compensatory mechanisms for municipalities.
As an example, he cites the expansion of the income tax exemption bracket, which, although he acknowledges its great social relevance, highlights a reduction in municipal revenue from Withholding Income Tax (IRRF) on the payroll of civil servants, which constitutionally belongs to the municipalities.
“In January of this year, we had a reduction close to R$175 thousand. If there is no compensatory measure throughout the 2026 fiscal year, the annual impact could be greater,” he reports. According to the secretary, depending on the measure, municipal coffers end up being somewhat more constrained in terms of investment availability.
The context brings to the debate the balance between meeting stricter fiscal targets and, at the same time, guaranteeing essential services. For Leandro, the challenge is not only one of internal management, but also of federative coordination. He emphasizes the importance of institutional dialogue and the role of the National Confederation of Municipalities (CNM) in articulating compensatory mechanisms, such as securing the additional FPM quota in September.
Administrative reform as a fiscal strategy
Beyond adapting to the new tax rules, the municipality of Silva Jardim decided to strengthen its own revenue-collecting capacity. An internal assessment revealed that, as in many other small municipalities, tax administration had historically not received institutional priority. According to the secretary, this often occurred due to fear of political fallout.
“Given the need to ensure the fiscal sustainability of the municipality, we realized that strengthening the tax administration was necessary and urgent,” he explains. Together with Mayor Maira Branco Monteiro, Vianna adopted institutional measures aimed at expanding the technical staff, increasing the number of positions for tax auditors and specialized support professionals, thus providing greater operational capacity and efficiency to tax management procedures as a whole.
Municipal Complementary Law No. 181/2023 restructured the tax administration, eliminated commissioned positions, and established bonus-based functions. “Access to strategic positions is now based on technical criteria and structured human resource management policies. Today we work with three pillars: technical appreciation of the employee, meritocracy, and institutional continuity,” explains the secretary.
According to him, linking promotions to performance and results has had concrete effects, such as greater team engagement, improved technical standards in deliverables, and a strengthened results-oriented culture. The department has become more stable, less subject to political interference, and better prepared to plan and execute public policies efficiently.
