Electronic Invoice: project removes power from the Revenue – 06/17/2023 – Market

A bill in the final stages of being discussed in the National Congress may remove powers from the Federal Revenue Service and open a loophole for private technology companies to provide the systems used by Brazilian companies to issue invoices and provide information to the Tax Authorities.

The proposal has already passed through the Chamber of Deputies and the CAE (Economic Affairs Commission) of the Senate. In this House, only the plenary vote is missing. If the text is approved without changes, the proposal goes to the presidential sanction.

The progress of the project worries the Ministry of Finance, as it may leave collecting agencies without autonomy to adopt measures that help in the inspection of the payment of taxes.

There is also an inconvenience with the fact that the proposal was managed by the private sector, especially by IT (information technology) companies, which are interested in the subject and can benefit financially.

The origin is confirmed by the author of the initiative himself, Senator Efraim Filho (União Brasil-PB), who filed it when he was still a deputy, in 2021. “It was not a project produced in offices. in the IT area. He left the streets for Congress,” he told Sheet.

Afrac (Brazilian Association of Technology for Commerce and Services) has actively participated in the discussion and has a page on its website dedicated to the proposal, called “Digital Tax Simplification”.

The text targets the so-called ancillary tax obligations, a term used to identify statements and requirements that taxpayers need to comply with, in addition to paying the taxes due on time.

In Brazil, the huge amount of these obligations is a target of criticism from companies and tax experts, in addition to boosting the so-called Brazil cost.

Under the justification of simplifying the system, the project —named mini-tax reform by its supporters— provides for the creation of the Brasil Eletrônica Nota Fiscal, with the unification of documents and tax records of all companies in the country.

The text also creates the CNSOA (National Committee for the Simplification of Accessory Tax Obligations), whose objective is to decide which accessory obligations will be enforceable.

The collegiate body would be linked to the Ministry of Finance, but would have a mixed composition, with representatives from the Union, States, municipalities and business confederations. Each group would have six nominations, with two years of mandate each and the possibility of reappointment.

The quorum for approval within the committee would be 3/5, that is, at least 15 out of 24 votes.

In the Treasury’s assessment, the design is wrong in giving taxpayers decision-making power over which instruments the Revenue can use to inspect them —which is seen as a conflict of interest.

The six seats of the confederations alone would not be enough to block any resolution of the committee, but the support of three other representatives would be enough to block any accessory obligation. This means that the collegiate can restrict inspection instruments.

Although they generate costs for taxpayers, there are ancillary obligations created by the Tax Authorities to help, for example, assess whether tax benefits are being enjoyed by those who are actually entitled.

There is a concrete situation that illustrates the application of this tool. Congress renewed the benefits of Perse, a program that exempts taxes from the events and entertainment sector (affected by the Covid-19 pandemic), at an annual cost of BRL 4 billion.

According to reports gathered by the Sheet, companies in other segments, such as cargo, tried to surf the Perse and collect less federal taxes. The government was only able to detect the irregularity because it created an ancillary obligation: the company needs to tick an option that indicates whether or not the company used the benefit of the program.

Under the design proposed in the bill, the IRS would need prior approval from the committee to create this requirement, and the request could be denied.

Government members defend that, if the project advances, the committee be transformed into an advisory body, to which the tax authorities are accountable, but without normative power.

There is a fear that the collegiate will become a new Carf (Administrative Council of Tax Appeals), which has an equal composition between Treasury nominees and taxpayers and has become the scene of billionaire defeats for the Union.

Senator Efraim Filho says that the composition of the committee “redistributes regulatory powers”. “That’s why the Revenue resists. It loses the pen every day to be downloading a different regulation”, he says.

In a public hearing held in the Senate last Tuesday (13), the Secretary of the Federal Revenue, Robinson Barreirinhas, said that the proliferation of ancillary obligations derives from the very complexity of the current tax system.

“We have the Union, the States and the municipalities taxing. And each one of them demanding different taxes, fees and contributions. It is difficult to find such a complex system [no exterior]. And the ancillary obligation turns out to be complex to reflect this complexity, “he said.

The secretary also said that, the way the project is, the Revenue loses autonomy. “This the Federal Revenue cannot accept and will propose, yes, alterations.”

Invoice platform

Another point criticized by the government is the fact that the CNSOA centralizes the tax information of all entities and companies and chooses the platform to store and manage this data —legally protected by tax secrecy.

Today, this is done through Sped (Public Digital Bookkeeping System), a technological solution maintained by the Federal Revenue through a contract with Serpro —a federal public company that provides IT services.

According to the proposal, there are loopholes for the service to be transferred to private companies.

“The committee is who defines. Form and model are matter for regulation, but we understand that the committee would have its datacenter. The project does not bring what the model would be”, says Efraim. In his assessment, it would be “natural” for the competence to continue with some public company, “even due to the sensitivity of the data”, but the final decision would be made by the collegiate.

The president of Afrac, Paulo Eduardo Guimarães, says that, initially, the operations would be centralized in Serpro itself, but acknowledged that the project leaves open the possibility of outsourcing.

“It may be that one day this committee decides that this provision of IT services is carried out by a private company. This is not on the radar today, but it remains a possibility for the future, if Brazil has a government that thinks about outsourcing the infrastructure “, he states.

The government is against this measure as it sees not only conflicts of interest, but also governance risks and a threat to tax secrecy.

The Treasury’s argument is that today there is already integration between the federal entities. All states and the Federal District are already on Sped. In municipalities, the process has been gradual, but 500 city halls, responsible for 60% of invoices, have already joined.

Efraim Filho states that the entry of municipalities into Sped is voluntary, and the bill would give more strength to this integration by making unification mandatory. “It is good for the productive sector and it is good for the government. By simplifying, it combats tax evasion”, he says.

For the president of Afrac, the new system could generate savings of R$ 152 billion for companies that currently bear the costs of obligations.

The general assessment of the economic team is that the search for simplification is valid, but caution must be exercised, especially in view of the possibility of approval of the tax reform.

“It is important that this discussion be concomitant with the reform, under penalty of a very large waste of energy and public resources”, warned Barreirinhas at the public hearing.

The representative of Comsefaz (National Committee of State Secretaries of Finance) at the hearing, Antônio Machado Guedes Alcoforado, said that debating ancillary obligations “is not opportune at this time”.

“This project, despite its noble purposes, is not adequate at this time, which precedes the possible approval of a tax reform,” he said. According to him, it makes no sense to review obligations related to taxes that will no longer exist if the reform progresses.

Senator Efraim Filho says that, after the hearing has taken place, he will charge the President of the Senate, Rodrigo Pacheco (PSD-MG), for the inclusion of the project in the plenary voting agenda.