Tax reform is “good on the way to great”, says Haddad

The tax reform will be “a good thing on the way to a great one”, said this Wednesday (21) the Minister of Finance, Fernando Haddad. According to the minister, after the reform enters into force – and having initial results in hand – it will be possible, over the years, to make updates towards the “desirable world” which would be the reduction of tax rates on consumption.

The statement was made this Tuesday (21), during the Tax Reform seminar: The Time is Now, at the headquarters of the National Confederation of Industry (CNI), in Brasília.

“They say that the best is the enemy of the good, but there is the good that is the friend of the great. The good that is a friend of the best is the one that points to the best. There is nothing in this reform that prevents us from improving it in the near future”, emphasized Haddad.

The minister said he had heard many comments suggesting a “more radical” tax reform proposal. He, however, warns that “the most radical would not pass”, since there are interests that need to be contemplated.

“We have to be mature enough to point in the right direction, given the relationship of forces, and push the country forward. You will see that, naturally, in the next period, we will be able to have a much more attenuated discussion on the question of what further steps can be taken, ”he argued.

In the second moment, “when the base is increased, who knows, it may be possible, over time, to reduce the consumption tax rates, which would be the desirable world: to reduce the rates on consumption, regardless of whether the reform (incides) on income. Decrease due to the fact that the base was expanded, allowing a rate more compatible with the international experience”, he added.

One of the worst systems

“We’ve wasted too much time. Brazil has one of the worst tax systems in the world, and it is no longer possible for governments or taxpayers to rely on the current system. Without the reform, it becomes much more difficult to manage even the fiscal rule. Brazil has a justice system that spends 2% of GDP (Gross Domestic Product, sum of all goods and services produced in the country). That’s four times more than the No. 2 in the world. Look at this: 40% of the cost of the judicial system is tax litigation”, said the minister.

“Apart from the fact that, every time you make an exception, the Judiciary will interpret that exception, and you don’t know where that exception will end up. So, you don’t know about the consequences of this exception in time, and chaos is installed”, he added.

This whole context ends up generating insecurity for investment decision-making, “both on the private and public sides, including the social areas”, added Haddad, reiterating that the tax reform is “a presupposition for us to take a step towards fiscal sustainability from the country”.

Privileged situation, says CNI

In the assessment of the president of the CNI, Robson Andrade, never has Brazil had such a “privileged situation” to carry out tax reform.

For Andrade, regardless of the various sectors that discuss privileges or issues, the discussion that the country needs to have “is not sector by sector, but what is best for the country, which has a problem of poverty and obstacles to growth that have been present for some time. decades”.

“We businessmen are not tax payers. We are tax payers. It is the people who pay these taxes. We want everyone to pay less. Who will benefit from this is the Brazilian population, “she added.