Chamber may slice tax reform to facilitate new approval

Approved in two rounds by the Federal Senate last Wednesday (8), with 53 votes in favor and 24 against, the tax reform returns to the Chamber of Deputies for a new round of discussions, as points changed during its passage through the Senate . The Proposed Amendment to the Constitution (PEC) 45/2019, which had been approved by deputies in a long week of negotiations at the beginning of July, can now be split to facilitate new approval, and thus be enacted by the government later this year, as the president of the House, Arthur Lira (PP-AL), says.

Lira told journalists, even before the result of the Senate’s approval of the text, that an alternative to facilitate the processing of the proposal would be to immediately approve the points of consensus between the Chamber and Senate, and leave the changes made by the senators for a later discussion.

“The Chamber will have to comment on what the Senate changed, that is a fact, period, which does not prevent that if 90% of the text is common, that 90% will be enacted. I think that, on a topic like this, common sense will prevail.”

Behind the scenes, parliamentarians cited Lira’s effort when the text of the Working Group formed in the Chamber to discuss the tax reform proposal went to the Plenary, with great resistance from sectors of the economy and governors. They believe that this time the president of the House will do the same, since the reform, under discussion for more than 40 years, could be the “great legacy” of his presidency, which ends at the beginning of 2025.

The tax reform rapporteur in the Chamber, deputy Aguinaldo Ribeiro (PP-PB), said that he will now wait for the final wording of the text by the Senate, and its arrival in the Chamber, so that the deputies can evaluate what was changed by the Senate, and , based on conversations between Lira and the leaders, a calendar is established to approve and promulgate the matter by the end of 2023.

“It is not a simple matter, but we will seek to maintain the ideal tax in the Chamber, which is the one that has the least impact on Brazilian citizens. Now is the time for the Chamber to carry out this discussion in a very calm and cooperative manner, so that we can have the constitutional text approved this year; and avoid what some people call ping-pong, preventing the text approved here from going to the Senate and remaining in a moment of prolonged discussion without closing the constitutional text”.

The rapporteur said that he intends to talk to the president of the Chamber as soon as possible to decide the possibility of a possible splitting of the proposal, and about a calendar and guidance on how the matter will be dealt with in the House, whether it will be sent to the Constitution and Justice Committee or whether the text will go directly to the Plenary.

Opposition criticizes text and says it will vote against tax reform in the Chamber

Deputy Abílio Brunini (PL-MT), declared against the reform currently being processed in Congress, said that despite not agreeing with the text, he believes that there will be no difficulties in its approval, since in addition to Lira, a good part of the parties in center and even the right admit the need to simplify taxes in Brazil.

For Brunini, as there is a rush to approve the matter, “I think he will have to slice it up, because if there is more change [no texto]return [para o Senado]. As there is a rush, and more from Lira than from Lula, from Centrão, if changes don’t work, they come back and it’s a game”.

In the opinion of the opposition deputy, the basic text of the proposal, with the definition of new taxes, without definition of percentages, state interests, exemptions and conflicts between benches, must pass through the Chamber, even without consensus from the opposition parties, which They believe that the reform as it stands will harm the poorest.

The parliamentarian also said that the right’s orientation is to vote against the proposal, but the strategy to be adopted should only be defined after the November 15th holiday, next week.

He recalls that former president Jair Bolsonaro has already openly spoken out for not approving the reform, and worked with the opposition in the Senate to block the text, in addition to declaring himself against the reform on social media.

The leader of the opposition in the Chamber, deputy Carlos Jordy (PL-RJ), also confirmed to the People’s Gazette that the PL will vote against the reform, and may obstruct the vote, a strategy recently adopted by the party and Novo to protest against the “usurpation” of Legislative powers by the Judiciary, and the advancement of customary agendas, such as those that prohibit abortion and possession and possession of drugs, in addition to measures to impose limits on the actions of the Federal Supreme Court.

Another parliamentarian who criticizes the tax reform is Luciano Zucco (Republicanos-RS). “I don’t see the Brazilian people satisfied with what the Senate just voted on. In fact, the biggest beneficiary of all this will be the federal government itself, which will have more money to spend as it wants. Spending poorly, by the way, without the slightest fiscal responsibility. In reality, what I’m seeing is a lobbying war, each one wanting to pull sardines into their roast. Or in other words, fighting to enter the list of tax exceptions,” he declared.

For the deputy, the large number of exceptions approved for services that will pay reduced rates or be exempt from Value Added Tax (VAT) will compromise the efficiency of the new system and result in a higher rate.

Lira’s efforts should guarantee the enactment of the reform in 2023, analysts say

For the professor of Tax Law at the São Paulo Law School, Fundação Getúlio Vargas, Carlos Eduardo Navarro, the slicing advocated by the president of the Chamber of Deputies to accelerate the vote on the tax reform will allow the partial promulgation of the text, that is, the part of the reform that was approved by the Chamber in July, and was not changed by the Senate, would now come into force.

With this, the Chamber of Deputies would have the mission of focusing only on the changes that were promoted by the senators during the analysis of the text.

Regarding the atmosphere in the Chamber, the professor assesses that “the expectation is that there will be no major difficulties in approving the new points by the Chamber”.

Juan Carlos Arruda, general director of the Ranking of Politicians, believes that the climate in the Chamber is favorable to the approval of the tax reform with a large majority, “since many of the Centrão’s demands and the interest in positions have already been met by the federal government” .

For him, the rush for approval, however, should not consider the possibility of slicing the proposal, although he admits that “President Arthur Lira is determined to leave a great legacy, tax reform being the main one, which explains the rush to approve it this year.”

On the day the tax reform was approved in July, the government paid R$5.3 billion in amendments, and also promoted a mini-ministerial reform to accommodate Centrão parliamentarians on the Esplanada dos Ministérios, with the appointment of Sílvio Costa Filho (Republicans), André Fufuca (Progressistas) and Celso Sabino (União Brasil) in the ministries of Ports and Airports, Sports and Tourism. But part of the agreement reached between the government and the president of the Chamber, Arthur Lira, remains to be fulfilled, who intends to nominate even more nominees for Caixa Econômica Federal and Funasa. Recently, Lula announced the change in the bank’s presidency, replacing the then career civil servant Rita Serrano with Lira’s nominee, Carlos Vieira.

Padilha thanks the Senate for approval of the reform and criticizes Bolsonaro

The Minister of Institutional Relations, Alexandre Padilha, was in Congress to thank the approval. Padilha spoke with government and opposition leaders, and with the president of the Senate, Rodrigo Pacheco (PSD-MG), and referred to the approval as a historic feat. According to him, the vote was historic.

Padilha also said that the reform is a victory for the country, and said that the loser on this issue was former president Jair Bolsonaro (PL), who tried to prevent approval by mobilizing the opposition in the Senate.

The minister also said he was confident in the rapid approval of the proposal by the Chamber of Deputies, together with other measures defended by the government to consolidate a set of legislative changes to strengthen the economy, such as the fiscal framework, for example. Padilha also admitted the possibility of slicing the reform in the Chamber, to guarantee the enactment of part of the proposal this year, and said that this hypothesis has always existed, and “has already been done at other times”.

“This is the first time that a tax reform has been approved in the Chamber and the Senate during a democratic period, a very important step has been taken to put an end to the tax mess that exists in the country, concluding at this moment a process that the government has insisted on since the beginning. to value the initiatives of the National Congress”.