Incentives for Cultural Projects (Fiscal Incentive or Patronage) – mechanism of the National Program of Support to Culture

National Secretariat for Promotion and Incentive of the Culture of the Special Secretariat for Culture (former Ministry of Culture)
Describe the main features of the policy/measure: 
The National Program to Support Culture (Pronac, in the Portuguese acronym) was established by Law Nº 8,313, of December 23, 1991, and has consolidated itself as the main federal financing instrument for cultural activities. The Program aims to: increase access to culture and cultural production in all regions of Brazil; support, value, and disseminate Brazilian artistic manifestations; protect our cultural expressions and preserve heritage; in addition to stimulating cultural production as a generator of income, employment, and development for the country. The Program works through two mechanisms: The National Culture Fund and the Cultural Incentive. In the National Culture Fund, support is granted through the direct application of resources from the Union budget to specific cultural projects, selected mainly through public notices. Between 2016 and 2018, 92 cultural projects were supported with resources from the National Culture Fund, totaling US$ 83,525,133.97, of which: 40 projects in 2016, with US$ 57,785,247.70; 23 projects in 2017, with US$ 15,849,972.43; and 29 projects in 2018 with US$ 9,889,913.83. In the Fiscal Incentive modality, individuals or companies that sponsor or donate resources to cultural projects benefit from a reduction in the income tax due. The latter is the mechanism that attracts the largest number of cultural projects. To benefit from financial assistance in the form of tax incentives, proponents submit cultural projects to the Special Secretariat for Culture, with the identification of objectives, budget, stages of execution, and accessibility measures. The analysis of the project is carried out in several stages, initially by referees and then by the National Commission for Cultural Incentive, formed by 21 members of civil society, appointed by class and associative entities, representing the cultural, artistic, and business sectors. After its approval, the project receives authorization to raise funds from companies and individuals. The Special Secretariat for Culture also monitors the execution and examines the accountability of the executed projects. The number of projects evaluated by the National Cultural Incentive Commission was 8,732 in the period from January 2016 to December 2018. Tax subsidies granted in this public policy were approximately US$ 547 million in 2018, and US$ 304.17 million in 2019, the year in which a financial sponsorship of US$ 375.14 million was made possible for almost 3,300 cultural projects. In 2018, training seminars were promoted in the 26 Brazilian capitals and the Federal District, with a total audience of approximately six thousand artists and producers, aiming to increase and qualify cultural projects in regions and cultural areas where PRONAC investment has historically been lower.
What are the results achieved so far through the implementation of the policy/measure?: 
The National Cultural Support Program has made it possible to carry out thousands of cultural initiatives. It is responsible for circulating more than R$ 1 billion a year in the Brazilian economy. The cultural products generated by projects financed through tax incentives reach hundreds of thousands of people, which means that the Program expands the democratization of access to culture, including people with disabilities since the projects must prove specific accessibility actions for this audience. Between 2016 and 2018, the Secretariat for Promotion and Incentive to Culture received and evaluated 8,732 cultural projects.
Financial resources allocated to the policy/measure in USD: 
National Culture Fund (2016-2018): US$ 90,385,065.21. Fiscal incentive (2016-2019): around US$ 1.75 billion.
Partner(s) engaged in the implementation of the measure: 
Name of partnerType of entity
annually, thousands of cultural agents, individuals, and legal entities, submit proposals to seize the support granted through the Program.
Civil Society Organization (CSO)
Has the implementation of the policy/measure been evaluated?: 
If yes, what are the main conclusions/recommendations?: 
As pointed out by the impact assessment carried out by the Getulio Vargas Foundation, most of the resources from the tax resignation modality (90%) were destined for the promotion of small cultural projects, up to US$ 31 thousand. This result shows the support given by the National Cultural Incentive Program to the promotion and preservation of culture in its multiple manifestations and dimensions. The National Cultural Incentive Program was also evaluated by the Ministry of Economy, which released its conclusions in March 2020. It was found that access to culture provided by the Program is quite regressive, since, while the richest 20% of the population concentrate 49.6% of expenditure on culture, the poorest 20% of the population account for only 5.5%. It was also found that the changes made in 2019 in the design of the tax incentives of the Federal Law for Cultural Incentives, to promote the deconcentration of these incentives and expand access to culture in all regions of the country, are still very recent for that all its effects can be analyzed. However, the first results suggest that changes in funding rules may not be sufficient to promote the democratization of access and a reduction in the concentration of benefits. In this sense, there was an increase of 9.7% in the volume of funds raised through incentives and 1.4% in the number of supported projects. However, approximately 65% of the total incentive resources were appropriated by only 10% of the proponents, while 60% of the resources went to 10% of the projects. There was also an increase in the relative participation of non-profit entities (58% of the total funds raised) and a decrease in the representativeness of business entities (41%), which may be indicative of a reduction in the granting of benefits to projects with strong profitable potential, less dependent on the need for public subsidies and with less impact on the low-income population. (Evaluation available at: -cultura.pdf).
Objetivo(s) de la Convención 2005 de la UNESCO
Cultural Domain(s)