Association of Supermarkets tells Haddad that tax reform could increase taxes on the basic food basket by 60%

The president of the Brazilian Association of Supermarkets (Abras), João Galassi, met this Saturday (1st) with the Minister of Finance, Fernando Haddad, in São Paulo, and expressed the entity’s concern with the impacts that the tax reform proposed by the Lula government in June would provoke in the sector.

According to information from Agência Brasil, Galassi presented an estimate by Abras that the proposal could lead to an increase of 59.83%, on average, in taxes on the basic food basket and hygiene items.

The biggest increase would be in the states of the South region, with an average increase in taxation of 93.5%, according to the entity. For the Midwest, Southeast, North and Northeast regions, the increases would be respectively 69.3%, 55.5%, 40.5% and 35.8%.

Last week, Abras had already expressed concern about the proposed tax reform in a note.

“The Brazilian Association of Supermarkets (Abras) received with surprise the text of the tax reform proposal presented this Thursday, 22, which did not include tax exemption for basic foodstuffs. The entity considers the topic to be a major need that needs to be analyzed in more depth in debates on the Brazilian tax system. The reform under discussion in Congress cannot precisely harm consumers who will be most impacted in the event of increased taxation of items in the basic food basket”, said the entity, which added that it would “prepare suggestions and propose improvements to the project to be presented to parliamentarians through substitute amendments.

To Agência Brasil, the extraordinary secretary for tax reform, Bernard Appy, declared at the end of this Saturday’s meeting that the level of taxes levied on the basic food basket should remain in the same current line.

“First, it’s not that they’re saying there’s going to be a 60% increase in the basic food basket. What they are saying is that the tax burden, the amount that is levied on the basic food basket, would increase by 60%, according to their accounts. By this type of reasoning, if I have a rate of 0.1% and it goes to 1%, it has increased by 900%. Second, even the bill they brought is wrong. Why? The calculation that Abras made simply took from the point of view of the current taxation of the margin of supermarkets, in the sale of basic basket products, of PIS Cofins, they estimated, based on the rates of each state, what the impact of the adoption of a rate that was 50% of a basic rate, which is what is foreseen in the PEC”, argued Appy, who also claimed that Abras did not take into account other factors, such as the “recovery of credits [de energia elétrica, por exemplo] that today they do not recover”.