Regulation of the tax reform will be for 2024

The regulation of the first phase of the tax reform, which simplifies taxes on consumption, will be scheduled for 2024, said this Friday (14th) the extraordinary secretary for Tax Reform at the Ministry of Finance, Bernard Appy. In a virtual event for a bank, he said that, in principle, four complementary bills are planned.

According to Appy, the first project will detail the rules for the future dual Value Added Tax (VAT). The second will create and regulate the Federative Council. The third will deal with the Regional Development Fund, and the last will bring rules for the accumulated credits of Tax on the Circulation of Goods and Services (ICMS), which will disappear to give way to the Tax on Goods and Services (IBS).

“In principle, these are four complementary laws. We do not have a set date, but we are working with the idea of ​​sending it to the National Congress at the opening of next year’s legislative session, in early February 2024”, declared the secretary.

Appy said that the government wants to build the projects in partnership with states and municipalities and that local governments will have some room for autonomy, as in the case of the IBS rate, a tax that is the responsibility of state governments and city halls.

According to the secretary, local governments may establish IBS rates, higher or lower, by means of a supplementary law. However, if nothing is done, the nationally defined reference rate will prevail. “If they don’t do anything, it’s worth the reference”, he said.

Regarding the Federative Council, Appy explained that the body, which will define the fiscal and tax policies of local governments by majority of votes and by majority of population in states and municipalities, will be a technical body, without political power. The secretary also informed that the supplementary law will have a distribution formula to allocate IBS resources to local governments.

Regarding accumulated ICMS credits, one of the liabilities that the tax reform will have to resolve, Appy said that payment by states to companies entitled to receive them will be guaranteed for 240 months (20 years). Through tax credits, a company can obtain discounts on the payment of taxes or be refunded because of taxes charged in excess along the production chain.