CNI praises guidelines that will guide the tax reform text

According to the president of the CNI, Robson Braga de Andrade, the modernization of the country’s tax system has the potential to accelerate economic growth and benefit the productive sector and the population.

“The new tax model indicated by the Chamber’s Working Group guarantees the development and growth of Brazil with advantages for Brazilians. This reform has been awaited for more than 30 years and, according to a UFMG study, should generate an additional 12% growth in the country’s GDP in 15 years. This means that, if the reform had already been carried out 15 years ago, today each Brazilian would have R$ 5,772 more in their annual income”, he assesses.

guidelines

The WG proposed that the five main taxes levied on consumption (IPI, PIS, Cofins, ICMS and ISS) be replaced by a value-added tax (IVA) called the Tax on Goods and Services (IBS). The IBS would be dual, that is, a tax from the Union and another from the states and municipalities.

Specialist in tax consultancy, Vinícius Costa, lawyer at Natal & Manssur, says that the general lines of the tax reform are positive. He agrees with the decision of the working group’s parliamentarians to opt for the IBS Dual model.

“The biggest concern I had with PEC 45 was that the IBS was being very similar to taxation in countries abroad, except that here in Brazil there is the detail of the federative pact, the competence of states and municipalities, and this adjustment was good , because now it will be a mixed”.

During the presentation of the guidelines, Aguinaldo Ribeiro said that he thought the single IBS model, with shared management between the Union, states and municipalities, was the best alternative for the new tax system, but that the option for the dual tax was the most sensible to take into account takes into account the interest of part of the states and municipalities in controlling the tax collection.

Vinícius Costa states that the option for the IBS Dual will not compromise the simplification sought by the reform. “Making dual VAT does no harm”.

The report also suggests different treatment for some sectors, such as health, education, public transport and basic foodstuffs, which would have lower rates than the general IBS rate.

The guidelines did not indicate what the general IBS rate will be, but during the reform WG debates a 25% threshold was suggested for all goods and services. The measure, with few exceptions. was also well received by the CNI. This definition will remain for the text that goes to plenary in the first week of July or for a complementary law, later.

For the specialist in tax consultancy, the reform aims to equalize the tax burden on the productive sectors. “Although there will be no increase in the tax burden, it is a fact that there will be an increase in taxation in the services sector, because the idea is to have a balance between taxation of services and taxation of products. Taxation of goods has always been higher.”

taxation at destination

According to the Deputy Director of the OAB/GO Tax Law Commission, Guilherme Di Ferreira, the report presented did not bring any surprises, as it consolidated what was already discussed in PECs 45 and 110, which deal with tax reform. One of the changes is taxation at the destination, where consumption takes place, instead of at the origin, where the service or good is produced.

“It will end the tax war between states, that’s the idea, but those incentives that companies had to be in each state end, because the less tax you place on the company, the company can reduce its production cost, reducing the amount charged for the provision of services or the final value of the product.”

To facilitate the transition to the new tax model, the report proposes the creation of a Regional Development Fund (FDR), financed with Union resources, with the objective of “reducing regional inequalities”.

Di Ferreira believes that the final text of the reform must come with changes to facilitate the transition from the current tax system to the new one, so that the productive sector is not even more lost when it comes to calculating, declaring and paying taxes. “It brings a big transition. We will be wandering between a complex system with a new tax system. For me, there had to be a greater study of how to apply this tax reform.”

Tax reform: House of Representatives WG report proposes Dual IVA