Government considers reducing transition period for taxation at destination, says Appy – 7/3/2023 – Market

The Extraordinary Secretary for Tax Reform, Bernard Appy, said this Monday (3) that the government is considering reducing the transition period from taxation at source (place of production) to destination (place of consumption) provided for in the reform, mention that some states ask for an anticipation of 26 years, compared to the 50 years foreseen in the text of the reform.

“We are evaluating whether this is possible to be done, how it is possible to be done”, said Appy during a meeting of the so-called Council.

“A shorter term can be discussed, but it has to be acceptable for those entities that lose participation in the cake, it is not possible to say that the Union will have to put money to cover the losers”, he added.

Appy also said that the government is setting up a tax structure that avoids tax evasion as much as possible, but added that he could not detail it because it is an operational issue.

“Since we are building a collection model from scratch, we will already be thinking from the beginning how to do this in order to mitigate tax evasion as much as possible”, he said.

In addition, the secretary said that the Simples Nacional —simplified taxation model— was not only included in the tax reform but also expanded its possibilities.

“Either Simples will be able to stay as it is today or, if [a empresa] If you want, you can keep Simples to tax profits… and enter the normal VAT debit and credit regime. For a company that is in the middle of the chain… for it the best deal is this option”, said Appy.

Regarding the second stage of the tax reform, which will focus on income taxation, Appy said that the government will seek to “correct loopholes” and added that incentives for the formalization of labor will guide the process of drawing up the taxation proposal.