Caiado: Tax Reform is crutch after leg amputation – 07/08/2023 – Market

The governor of Goiás, Ronaldo Caiado (União Brasil), criticizes the proposed Tax Reform on consumption that was approved by the Chamber of Deputies and says he will seek changes in the Senate.

“I think that there, our chance of overthrowing the Federative Council is very strong”, he tells Sheet. For Caiado, the reform will be harmful for the states and for the agricultural sector.

The governor still complains about the way the proposal was presented for voting, without going through commission analysis. He says that the rapporteur, Aguinaldo Ribeiro (PP-PB), did not provide transparency to the different versions of the text and did not present the draft supplementary law that will need to detail the Tax Reform.

Mr. Will you seek changes in the Senate?
I will, without a doubt. I think that by then the discussion will surface a lot. And with that we will have the opportunity to demonstrate what I believe, as the younger ones say, “the penny will drop”. As the Federal Senate represents the federal entities, they have this prerogative. I believe that they would absolutely not admit a Federative Council that revokes the stony clause and removes the autonomy of states and municipalities. I think that there, our chance of overthrowing the Federative Council is very strong.

In addition to that, what other point are you most concerned about in this text that was approved?
The essence, the main thing, is this subject. The second point is that people really, instead of starting a reform, I think that bill 3887 of 2020, which creates CBS, should be voted on [ex-ministro da Economia] Paulo Guedes, later we would do our ICMS with ISS. I think the way the Chamber of Deputies wanted to do [é ruim]she dealt with all matters, did not simulate any of them and sent them all to the complementary law.

So, I mean, you make all the guesses about a patient but don’t propose any treatment. You save everything for the next shift. He didn’t do any simulation, I repeat, and he also didn’t present, what I think is most important of all, which is the technical note from the Federal Revenue Service and the Ministry of Finance to say what the neutral rate will really be [do IVA, o Imposto sobre Valor Agregado a ser criado pela reforma a partir da fusão de outros]. He says 25%, I say 35%. So, he should have put in the text there: “the rate in the country will not be above 25%”.

Mr. has already complained that the reform will harm agribusiness. Mr. hold position?
Yes, for a very simple thing. When you have a 35% rate and you say that the levy on inputs will be halved [dessa alíquota], all the calculations that were made, when it exceeds 30% it already reaches the sector, it already has a loss. Up to 25%, fine, no wins, no losses. Now, with 35% or 30%, the sector is already a loser. The tax burden on everyone, this part of inputs, will be very high and people are close to the difficulty of continuing with the same level of application of pesticides, fertilizers, seeds, these things.

The rapporteur inserted an article that allows maintaining the collection of contribution on primary products until December 31, 2043, according to him at the request of Goiás and other states. Will this allow the state to collect more than it already collects today?
He removes the FCO from us [Fundo Constitucional de Financiamento do Centro-Oeste], which is three times larger than this fund. He withdraws from us the fund to combat poverty, withdraws from us the incentive to culture, called the Goyazes law, and withdraws the art and culture fund.

So, you see, seeing this there as compensation is even a joke. “I let the Investment Fund remain.” But you let a fund remain and you take away FCO, which is the biggest investment lever we have in the region, you take culture and art fund and you take away the incentive fund by the Goyazes law.

So, these are the follies. “Ah, but in article 20 there is this here that you can continue to collect”. My friend, you are taking more than R$ 3 billion from me from the FCO, you are taking this entire policy based on this incentive that I give to the company. The anti-poverty fund: want to know how much you have today? BRL 3 billion. Every social policy of the government is carried out through the collection of companies that are encouraged.

So it’s like “look, I’m going to amputate your leg, but give you a crutch”.

What is your assessment of the voting process, of placing the final text directly in plenary, of having been presented ten days ago. How did you see this?
With a lot of strangeness. Because my whole life as a deputy and senator that I have been, there is a ritual that you have to follow. These are the norms of procedure, it is an amendment to the Brazilian Constitution.

It cannot have an innovative text within the final text that has not been discussed within the committee. Never seen that in my life. A text, which does not exist, will be read and presented to the deputies and enter into the voting process. I don’t know if the regiment was complied with, how to make an amendment [sugestão de mudança no texto que passa por votação]? I would amend the [texto] hypothetical.

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Ronaldo Caiado, 73
Current governor of Goiás, he was re-elected in the first round of elections this year with 51.81% of the votes. He was a federal deputy between 1991 and 2014 and a senator between 2015 and 2018, when he asked for a leave of absence to take over the government of Goiás. Born in Anápolis (GO), he is a doctor and cattle rancher.