Tax reform: complementary bill is positive, but rules for basic food basket and right to credit can improve

The proposal presented by the Ministry of Finance this week details the new tax system – approved at the end of last year. The bill is the first in a series of proposals that aim to explain the commands that are already in the constitutional text.

This first proposal regulates the three new taxes that will be charged to people and companies when purchasing a product or acquiring a service: the CBS – which replaces PIS, Cofins and the IPI, from the federal government –, the IBS – replaces the ICMS and ISS, from states and municipalities –, and the Selective Tax, which will apply to anything considered harmful to health and the environment.

Bianca Xavier, Law professor at FGV Rio, says that, in general, the text was well prepared by the Ministry of Finance. “In general, I think it fulfilled its role. They really did the regulatory work that the Constitution required. Many of the issues that we discussed at the time of the amendment, which were of concern to the taxpayer and, it was foreseen that only in the regulation would come this explanation, and it came. We moved forward and managed to bring out what this model will be like, it is much clearer for the taxpayer”, he highlights.

Lawyer João Maia, a specialist in tax law, says that the text covers all the points required by the constitutional amendment. “The first impression is that it covers everything that was covered in the proposed amendment. There is great detail on the rules – this is positive –, from how to calculate taxes, who and where will pay CBS, IBS and Selective Tax In principle, we should have legislation just for the two taxes. This is very good, because it brings legal certainty, because our current system is very fragmented”, he analyzes.

One of the most debated points surrounding tax reform last year was the percentage of tax that will be levied on goods and services in the new system. This week, along with the complementary bill, the government announced that the final CBS rate plus IBS should vary between 25.7% and 27.3%. The exact percentage will still depend on the number of products and services that will receive different treatment; In practice, they will suffer less taxation. The more sectors benefit, the higher the standard rate will have to be, since the legislators’ idea is to maintain the level of revenue.

The sectors with different treatment, such as health and education, were already defined in the main text, but it is up to a complementary law to point out the products and services in these sectors that will be entitled to a reduced rate of 60%, 30% or zero in the new system. The bill presented this week includes this list as well.

Maia says that there are points in the bill, such as the number of activities with different treatment, which are inherited from the constitutional text. “Some criticisms that it is possible to make to the text are a result of the Constitution itself. When we say: ‘ah, there are a lot of activities subject to the reduced rate’. Fact. But this comes from the amendment. It was a debate that Congress had the last year.”

National Basic Food Basket

The text edited by the government also listed the items that will make up the National Basic Food Basket. CBS or IBS will not be charged on these products, such as rice, beans, coffee and milk, for example. João Maia says that the basket regulation was positive, as it prioritizes healthy foods, which aligns with the objective of the Selective Tax.

In total, there are 15 foods listed in the bill, a number that Bianca Xavier considers lean and subject to changes in the National Congress. “It was very economical. The proposal that the Parliamentary Agricultural Front made is the opposite. There is a lot (item) on one side and little on the other. I think that, perhaps, the perfect system is the union of these two. I believe that 15 items is extremely reduced and this impacts cashback, which will impact lunch and dinner for all Brazilians. It will cause inflation and problems even accepting this new model that we are saying is so good. Brazilians’ daily life?” asks Bianca.

Credit

The experts also commented on the article in the text that contains the rules for crediting taxpayers. The bill says that the taxpayer will only be able to obtain the CBS and IBS credits to which he is entitled when the person from whom he purchased the good or service – supplier – has paid the taxes.

The point has generated controversy, because it would condition a taxpayer’s right to credit on payment of the tax by a third party. For Bianca Xavier, there is nothing to worry about, as long as the split payment system designed by the Ministry of Finance gets off the ground.

“They are talking about a payment split system. What will happen, according to them, is that when you buy the product, imagine a blouse that costs R$100, and the tax would be 20%. It will be 20 for the store and 80 to the government. When you pay for the blouse, the banking system already makes this division. In this condition, there is no problem, because there will be no tax evasion, because there will always be the tax paid in the previous stage. you pay in cash.”

João Maia believes that the text leaves room for more than one interpretation. The first, he says, is less harmful to the taxpayer, because the right to credit would be conditional on proof of the transaction through the invoice. He exemplifies.

“Imagine that you sell me a computer and, on your invoice, you have the CBS of 8% and the IBS of 18%. I, the buyer, paid the CBS and the IBS. You issued an appropriate invoice. The expected rule of If proof by invoice is fulfilled. Here comes a reality in Brazil: the seller takes the resource and does not pay the CBS and the IBS. The government, which is the creditor, did not receive it, because two private entities made a deal and one of them left. appropriated public resources. The second condition, according to the project, is that the tax credit amounts correspond to what was paid in the acquisition. It is the value of the note that you issued to me, and I paid the price of the merchandise with the taxes. So, I have the right to take credit”, he says.

He criticizes, however, if the condition for the taxpayer to receive the credit also requires a third party to properly collect the taxes. “If I interpret this rule in such a way that I can only take credit for the IBS and CBS that accrued on a computer you sold to me, if you pay the CBS and IBS to me, it is unconstitutional and goes head to head with the that the Judiciary has already said about this type of attempt to limit the buyer’s rights. It is not possible to transfer this type of burden to the buyer”, he adds.

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