Tax Reform: see the 15 items in the basic basket that the government chose to have taxes zeroed in the new system

Fifteen. This is the number of items that the government listed to make up the National Basic Food Basket, in a complementary tax reform bill sent to the National Congress. The basket will be exempt from CBS and IBS — taxes that replace PIS, Cofins, IPI, ICMS and ISS.

The list includes rice, beans, milk and bread, for example, common foods on Brazilian tables. However, meat, salt and cheese were left out, which instead of zero taxation will see a 60% reduction in CBS and IBS rates, according to the proposal.

For experts interviewed by Brasil 61, the government was economical when it came to putting together the list of foods that will have taxes zeroed. According to Alan Medina, a lawyer specializing in tax law, partner at Böing Gleich Advogados, the choice for a lean list reflects the search for a tax system that has a greater scope than the current one.

“One of the central objectives of the tax reform is the expansion of the tax base, that is, that more items of civil life, more acts of commercial life, are affected by taxation. Therefore, the inclusion of fewer items in the basket bill Basic reflects this trend”, he assesses.

Paulo Henrique Pêgas, professor at Ibmec and member of the Tax Reform Committee of the Federal Accounting Council (CFC), believes that the Ministry of Economy was right to limit the extension of the basic tax-free basket.

“The instrument of cash back, the return for low-income families, will work better than an extension of this zero rate. You will return half of the tax on the energy bill, half of the tax on the water bill, Telecom bill, the entire tax paid on the gas cylinder and, at least, 20% of the taxes included on other goods and services, in the case of families with monthly per capita income of up to R$706, which is half the minimum wage. For example, a family of four, with an income of R$2,600, will have their tax refunded, which seems to me to be a much more interesting tax policy than simply extending the zero rate”, he analyzes.

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

Contrast

The National Basic Food Basket sent by the government contrasts with a proposal made by a group of 30 deputies — which provided for meat, honey, tea, biscuits, prepared sauces, salt and other items, in addition to those on the list made by the Executive.

For Bianca Xavier, professor at FGV Direito Rio, the list of 15 items is “extremely reduced”. “This will impact lunch and dinner for all Brazilians. It is a measure that will cause inflation and problems with acceptance of this new model”, she believes.

Experts believe that the government’s choice for a leaner list could be part of a strategy to leave room for negotiation with parliamentarians who will probably ask for more food to be included in the basket.

“When you include fewer items at the beginning, you open up less space for additions. So, in fact, the government’s strategy is for the text approved in the end by Congress to have fewer items. In this way, the project perfectly meets this objective”, understands Medina.

Bianca Xavier says that the ideal is to find a middle ground. “The government 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”, he suggests .