Government-sponsored tax reform adds support and opposing voices

Amidst the discussion on controversial points of the tax reform supported by the government, public manifestations swell the chorus of groups against and in favor of the approval of the matter. While the mayor, Arthur Lira (PP-AL), strives to place the proposed amendment to the Constitution (PEC) that changes the country’s tax system on the agenda of the plenary of the House later this week, opponents try to postpone the processing of the proposal.

The text that can go to the vote this Thursday (6) is a replacement by federal deputy Aguinaldo Ribeiro (PP-PB) for PEC 45/2019, authored by Senator Baleia Rossi (MDB-SP), based on a proposal by the economist Bernard Appy, current Special Secretary for Tax Reform at the Ministry of Finance.

The version is sponsored by the federal government, which maintains material on the Ministry of Finance’s website in defense of the approval of the tax reform. The proposed merger of PIS, Cofins, IPI, ICMS and ISS into a dual Value Added Tax (IVA) is supported by Lira and by Senate President Rodrigo Pacheco (PSD-MG).

Group releases manifesto in favor of tax reform

On Tuesday (4), a group of economists, businessmen, lawyers and professors, as well as former governors, former ministers and former secretaries, among other authorities, released a manifesto in which they defend the approval of the PEC. More than 65 names sign the text, entitled “Economic growth and social justice: a manifesto for tax reform”.

“We recognize that there is no ideal tax reform. However, we are confident that the tax reform, if approved, will have a very positive effect on the country’s productivity and growth, in addition to reducing our social and regional inequalities”, says an excerpt from the letter.

“We know that changes like this generate resistance and fear on the part of some economic agents and entities of the federation. But we are sure that the benefits for the population and for the Brazilian economy will be reaped by all.”

Among the signatories are the former presidents of the Central Bank Affonso Celso Pastore, Arminio Fraga and Henrique Meirelles; former finance ministers Guido Mantega and Maílson da Nóbrega; former governor of Rio Grande do Sul Germano Rigotto (MDB) and former senators Roberto Freire (Cidadania-SP) and Roberto Rocha (PTB-MA).

Businessmen such as Horácio Lafer Piva, João Amoêdo, Jorge Gerdau, Pedro Passos and Salo Seibel also sign the document, as well as economists such as Bráulio Borges, Fabio Giambiagi, Fernanda de Negri, Manoel Pires, Marcos Mendes, Samuel Pessoa, Sérgio Gobetti and Vanessa Rahal Canada, among others.

“We need to approve the PEC 45/19 tax reform in 2023. This change has been discussed for 35 years and the current proposal has been widely and democratically debated over the last 4 years. Now, we have the best window for approval in recent decades – with political alignment between Congress, the Federal Government, most states and municipalities and the private sector. This is our opportunity to leave a legacy of prosperity, transparency and more justice in our country”, conclude the signatories in the manifesto.

Group against tax reform also grows

On the other hand, the group of opponents of the text being discussed in the Chamber is also growing. While there are governors who ask for changes in the proposal of Deputy Aguinaldo Ribeiro, the Chief Executive of Goiás, Ronaldo Caiado (União) speaks openly against the unification of the state ICMS with the ISS of the municipalities and the end of the tax benefits granted by states.

On Tuesday (4), he defended his position at a meeting of the Parliamentary Entrepreneurship Front (FPE) and later gathered the entire bench of state deputies to try to convince them to reject the proposal, according to the newspaper “Valor Econômico”. .

On the same day, the former President of the Republic and Honorary President of the PL Jair Bolsonaro said that his party will instruct its deputies to vote against PEC 45 in the Chamber. “The President of the Liberal Party [Valdemar Costa Neto] and its leader in the Chamber of Deputies [Altineu Côrtes] will forward, together with their 99 deputies, for the total rejection of the Tax Reform PEC”, wrote the former representative in his social networks.

Legend deputies such as Luiz Philippe de Orleans e Bragança (PL-SP) and André Fernandes (PL-CE) had already publicly declared themselves against the matter even before Bolsonaro’s demonstration. Senator Oriovisto Guimarães (Podemos-PR), also against the adoption of VAT in Brazil, filed an alternative PEC for tax reform in the Senate.

Also on Tuesday, the National Front of Mayors (FNP) released a note in which it is against voting on the proposal. “It is not possible to carry out a tax reform, with this inadequate form of procedure, withdrawing resources from the cities”, says an excerpt from the manifesto. “The text that advances in the Chamber brings uncertainty for the municipalities and for the citizen. The word ‘may’, for example, appears 26 times in the proposal, which reinforces the lack of clarity about the model.”

Entities representing supermarkets, the service sector and agribusiness have also already released positions in which they question points in the text, as well as the Committee of Finance Secretaries of the States and the Federal District (Comsefaz).