To escape the trap created by creative accounting and regain the credibility of the fiscal policy, the Brazilian government needs to improve the institutional framework of the Brazilian tax system by adopting a new fiscal policy rule (RPF) that fluctuates with economic and financial cycles - such as the rules already used by the European countries members of the OCDE and emerging countries, such as Chile and Colombia. The conclusion is part of a study conducted by the researcher in the field of Applied Economics of the Brazilian Institute of Economics (FGV/IBRE), Gabriel Leal de Barros and released on April 30.The large number of extra operations in recent years, which is different from the manipulation of the accounts itself, happened mostly because of the tax system, that chases a fixed income target, said Barros explaining that the need to meet this goal when the economy is growing at a slower pace encourages the search for compensatory revenues. The solution is to improve the fiscal rule, which tends to fluctuate with the economic cycle, he added.When analyzing the performance of primary income and GDP to learn about the actual revenue performance, Barros eliminated from the data released by the National Treasury non-recurring income (anticipation of dividends, debt refinancing, including the REFIS and revenues with concessions and grants). Thus, the plan is to find out the revenues more adherent to the fundamentals of the economy, known as recurring revenue collection. The study shows that in two periods - 1998-2002 and 2010-2013 - the ongoing tax statistics were quite influenced by nontraditional operations in fiscal management.The expert also calls attention to the composition of the economic cycle. Based on 2001, 2003 and 2012 - in which real economic growth rates were close to 1.4%, 1.2% and 1%, respectively, the dynamic expansion of revenue proved to be quite different, 5.5% -2.3% and 2.5%. This evidence reinforces how the heterogeneous effect of the growth cycle affects revenue trajectory, he said.Please click here and read the whole study.