Bolsonaro and Tarcísio disagree in a meeting on tax reform; watch video – 7/6/2023 – Market

São Paulo Governor Tarcísio de Freitas (Republicans) and former President Jair Bolsonaro (PL) had a public disagreement during the PL meeting to discuss the party’s position on tax reform.

Bolsonaro has spoken out against the proposal, while Tarcísio defended the text after negotiating changes with Minister Fernando Haddad (Finance). The position of the former president’s party may be decisive for the approval of the proposal defended by the Lula government (PT), since the PL is the largest group in the Chamber (with 99 of the 513 deputies).

For Tarcísio, the right cannot lose the narrative of being in favor of tax reform. “Why, if not, does the reform end up being approved and who approved it?”, he stated. The governor is interrupted by a woman from the audience who considers the proposal “bad for the people”.

The former representative also interrupted Tarcísio’s speech, when his former minister defended the participation of the right in the tax reform.

“Guys. The big question is to build a good text”, said Tarcísio. Bolsonaro took another microphone without prior notice and said that “if the PL is united, it does not approve of anything” — receiving applause from his supporters.

Tarcísio also stated that he was not defending the vote on the proposal on the same day, receiving applause but also objections. “I’m trying to explain… I’m trying to explain,” said the governor.

Another woman in the audience remembers the video released the day before by Republicans in which Tarcísio and his party defend the proposal. “I think it’s risky for the right to give up on tax reform because… All right, people, if you don’t think tax reform is important, don’t vote,” she said.

The statements were recorded by a participant of the meeting in a video, which ends after a request in the microphone for the meeting not to be recorded.

A few weeks ago, Tarcísio was against the proposed tax reform debated in the Chamber. He contested the model of a centralized collection of post-reform tax collections (through the so-called Federative Council, to be formed by states and municipalities) —which could make the state lose control over the collection of taxes and then transfer the part that belongs to other entities.

Tarcísio had been advocating the creation of a clearinghouse between state governments to manage resources collected in the new IBS (Tax on Goods and Services), to be created from the merger of other taxes.

But the head of the São Paulo Executive ended up giving in to the lack of support from other governors to his idea and after agreements with the Ministry of Finance and the rapporteur Aguinaldo Ribeiro (PP-PB) to change the text in a less significant way. Next to Haddad on Wednesday (5th), he stated that he would not turn demand into a “workhorse”.

Tarcísio admitted accepting the creation of the body as long as there is a change in the rules of composition of the body. On Wednesday night, Haddad announced a new proposal for the format of the Federative Council to provide a definitive solution to the impasse with Tarcísio —giving more weight to São Paulo than before (which was also a demand from other governors, such as the South and Southeast ).

Haddad said that the proposal sent to the rapporteur foresees combining two criteria in the voting of the states: it will be necessary to have a majority in number of units of the federation and also in terms of population to approve the deliberations. “Both criteria will have to be met,” he said. In the case of municipalities, the logic of the majority of inhabitants will prevail. Ribeiro must present a new text considering the proposal.