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Lotex direct sale can yield US$ 900 million for Brazilian government

With revenue falling, the government is already studying a plan B to meet the goal of keeping the balance of public accounts. According to O Globo, the sale of Lotex, the scratch cards company of Caixa Econômica Federal, could be done by direct concession. Thus, the money would go directly to the National Treasury. The four largest instant lottery holding groups are interested in the auction.

With government revenue falling, it is already studying new options to meet the goal of keeping the balance of public accounts at a maximum of US$ 42 billion this year. According to sources heard by local media O Globo, among the possibilities under study is the increase of the Contribution of Intervention on the Economic Domain (Cide). However, the possibility encounters resistance.

"There is a lot of resistance still within the government," said an interlocutor of President Michel Temer, on condition of anonymity, who concluded: "It is unpopular."

The argument of those who are against it, is that the measure is quite unpopular at a time when the government is at the most politically weakened because of accusations of corruption against the President of the Republic. What can be raised is also considered low, since the measure would only take effect in the final three months of 2017. The collection projected is only US$ 900 million.

This money could be achieved by other ways. One of them would be to make the sale of Lotex, the scratch cards company of Caixa Econômica Federal, by direct concession. Thus, the money would go directly to the National Treasury. The bank wants this transaction to be done via Caixa as a privatization inside the institution. With this, the resources would go to the balance sheet and the Union would receive the payment of tax on the operation.

If the transaction is made as advocated by the Ministry of Finance, it can yield up to US$ 900 million for the government. If it were via Cash, earnings would fall by half. It was scheduled to take place in November, but the timeline was anticipated, according to sources heard by O Globo.

"We ran the schedule for the efficiency of the technicians," said another source, on condition of anonymity.

According to a source close to the negotiations, the four leading groups of instant lottery exploration are interested in the auction. Demand would not have fallen even with the country's political landscape.

Source: GMB / O Globo