Sep 14, 2020

 The Brazilian Development Bank’s (BNDES) Board of Directors approved financing for the Municipality of Crato, in the state of Ceará, via the Program for the Modernization of Tax Administration and the Management of Basic Social Sectors (PMAT). With the Bank’s support, it is expected that, by the end of 2023, more citizens will contribute to the municipality’s revenues, increasing the collection of ISS and IPTU taxes, registering up to 50,000 properties. It is also estimated that around 10 million documents will be digitalized and that the average time taken to process cases at the city hall will decrease from 96 to 24 hours.

The project to be implemented in Crato covers the three goals defined by the PMAT: increase tax collection, reduce expenses and improve services rendered to the population. To this end, the project foresees a series of city interventions, such as building a Citizen Service Center (including the purchase of furniture and computer equipment and the training 30 employees); hiring consultants to review environmental and use of urban land legislation; modernizing tax audit; updating the technical registry with georeferencing by hiring a specialized service; computerizing protocol and implementing a structured system for managing documents and processes; updating the technological infrastructure of the municipality, with restructuring of the datacenter and implementing a 30 km optical fiber information highway to integrate public administration agencies.   

Crato is the sixth most populous city in Ceará, with an estimated population of more than 130,000 inhabitants, and integrates the metropolitan region of Cariri, whose biggest city is Juazeiro do Norte. BNDES financing, totaling R$ 19,7 million, will improve the service to the population, reducing queues and increasing agility in the provision of services. It will also contribute to greater financial autonomy for the municipality, rendering it less dependent on the state of Ceará and the Union. We expect that the improvements implemented will render the decision-making process more efficient and value the municipality regionally even, attracting people and economic activities. The initiative is especially important in the current situation, of tax restriction in the public sector in general and facing the Covid-19 pandemic when municipalities need greater management capacity and balanced finances.  

Impact of the PMAT on the Northeast – PMAT is a credit line created by BNDES in 1997. Since then, the program has benefited 498 municipalities, 60 in the Northeast and 24 in the state of Ceará. According to Julio Leite, deputy managing director of BNDES’ Public and Socioenvironmental Management Division, “a study on the program, conducted in 2019 by BNDES’s Evaluation and Effectiveness Promotion Department, pointed out an expansion of tax revenue of around 23% and budgetary expenses of approximately 11% in the municipalities financed in the Northeast, highlighting the importance of the program for the municipal administrations, which improved the collection of revenues and the services rendered to the population. 

About BNDES – Founded in 1952 and currently linked to the Ministry of Economy, BNDES is the main instrument of the Federal Government to promote long-term investments in the Brazilian economy. BNDES offers special conditions for micro-, small- and medium-sized enterprises, as well as social investment lines, directed at education and health, family agriculture, sanitation and urban transport. In crisis situations, BNDES acts in an anticyclical manner and assists in formulating solutions for resuming economic growth.