Tax reform: Selective tax and credit refunds should drive voting on regulatory text
Publication date: July 10, 2024, 11:31 AM, Last updated: July 10, 2024, 1:04 PM
The Selective Tax — dubbed the “sin tax” — is one of the new features that generates the most debate in Complementary Bill (PLP) 68/2024. This bill was responsible for regulating the tax reform approved at the end of last year.
The proposal approved at the end of 2023 only contained general rules regarding the new tax, which aims to discourage the consumption of goods and services considered harmful to health and the environment, but the PLP indicates which items these will be. In addition to the incidence on the extraction of minerals, such as iron ore, and oil, the text sent by the government provided that the Selective Tax will tax combustion vehicles, vessels and aircraft, cigarettes, alcoholic beverages and sugary drinks, such as juices and soft drinks.
However, the Working Group created in the Chamber of Deputies to analyze the PLP decided to include electric vehicles in the list of activities taxed by the IS — due to the environmental impact of batteries — and gambling, including sports betting.
Tax lawyer Leonardo Roesler, partner at RMS Advogados, explains that, in theory, the Selective Tax does not have revenue collection as its main objective. “It is a tax that does not have a fiscal purpose. It is what we call extra-fiscal. The purpose of this Selective Tax is to tax the consumption of certain goods, but, in theory, in the spirit of the law, it is not to collect revenue. It increases the acquisition cost, in order to discourage consumption”, he points out.
As already foreseen in the project sent by the government, exports, operations with electricity and telecommunications are exempt from IS, which also cannot be applied to public road and metro passenger transport.
Credits and reimbursement
According to the complementary bill, the taxpayer will be able to appropriate credits only if the supplier from whom he acquired a product or service pays the amounts of the Contribution on Goods and Services (CBS) – which replaces PIS, Cofins and IPI – and the Tax on Goods and Services (IBS) – which replaces ICMS and ISS.
The point has generated controversy, because it would condition a taxpayer’s right to credit upon payment of the tax by a third party. However, according to the Extraordinary Secretary for Tax Reform at the Ministry of Finance, Bernard Appy, the measure will be important to prevent fraud.
The version of the PLP presented by the government states that taxpayers who have a credit balance may request full or partial reimbursement of the credits from the IBS Management Committee or the Federal Revenue Service — responsible for the CBS. The initial deadline for assessing reimbursement was up to 60 days, but the Chamber’s Working Group reduced it to 30 days in cases where taxpayers are included in compliance programs developed by the IBS Management Committee and the Federal Revenue Service, but maintained the deadline between 60 and 180 days for other companies.
The production sector is asking that the tax authorities do not distinguish between companies and that the deadline for assessing reimbursements be up to 30 days for all taxpayers, except in cases that deviate from the standard and require more time to identify possible irregularities. The National Confederation of Industry (CNI) has released a statement on the matter. CNI’s Economics Superintendent, Mário Sérgio Telles, points out that the replacement for PLP 68/2024 presented by the Chamber’s Working Group brought improvements in the deadlines, but that they should be even shorter.
“The CNI advocates that the credit balance for the general rule be returned in 30 days, assessed in 30 days and paid in 40 days. We understand that companies in compliance programs must have an even shorter period to assess this return, around 15 to 20 days, and the general rule must be 30 days for assessment and 15 days for payment for companies,” he explains.
Furthermore, businesspeople argue that the text should provide for punishment for the IBS Management Committee and the Federal Revenue Service if reimbursement is not made within the timeframe provided for by law.
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