Simples Nacional: Tax Reform text that is being processed in the Senate could change rules and reduce the competitiveness of micro and small businesses

One of the texts that regulates the Tax Reform — the PLP 68/24 — brings important changes for companies that have opted for the Simples Nacional. If the text is approved as it is, remaining in the Simples could mean a loss of competitiveness for small business owners. If they decide to migrate to the hybrid tax regime, the viability of their small business could be compromised.

This is the view of the Confederation of Commercial and Business Associations of Brazil (CACB), which represents the sector, which has 20 million micro and small businesses across Brazil. CACB’s legal vice president Anderson Trautman points out that the text has already made progress since the proposal was first proposed in 2023.

“The initial proposal made it impossible for those opting for the Simples Nacional to generate credit for the purchaser of the goods. It is important to remember that credit is the central point of the tax reform, the so-called broad non-cumulativeness”, he highlights.

Credit generation and competitiveness

If the text currently being processed in the Senate is approved, companies that opt for Simples will reduce their credit generation and, as a result, lose competitiveness in the market. According to Trautman, there has been progress, but it is not enough.

“In the regulation, the credit that was allowed — based on the work of the CACB — was incorporated from article 28, but it is restricted to that amount collected by the optant within the Simples Nacional regime, that is, if the general rate is around 26.5%, we would have a credit between 2%, 6%, 8%, 10%, for the Simples Nacional optant.”

What changes in the collection

With the replacement of ICMS, ISS, PIS, COFINS and IPI taxes by IBS and CBS, companies will have two options for collecting CBS and IBS. They are:

Collect contributions according to the rules of Simples Nacional: taxes will be replaced, but the tax burden will not change. Those who choose this option will be able to transfer credits in the same proportion as what was collected; on the other hand, they will not be able to have CBS and IBS credits paid on purchases;

Collect CBS and IBS under the normal assessment regime: this means having the same tax burden as companies that do not opt for the Simples Nacional. Thus, taxes will be collected outside the DAS form and companies will be able to appropriate and transfer credits in full and not proportionally.

In any case, micro and small business owners would lose out, as understood by the entities that represent the sector. In an attempt to change the text, CACB is leading a movement in the national congress, as Trautman explains.

“So that PLP 68/24 — which is precisely the one that deals with this issue of regulating non-cumulativeness — allows that, at least the CBS, which is the contribution that replaces PIS and Cofins, is subject to full credit by purchasers of companies that opt for the Simples Nacional.”

According to the manager, this is the proposal that is appropriate for the Constitutional Amendment. In this way, it allows for the maintenance of the tax burden and competitiveness currently in force in the system.

By Brasil 61