Haddad says he expects a vote on the tax reform in the Senate by October – 03/13/2023 – Market

The Minister of Finance, Fernando Haddad (PT), said this Monday (13) that the government of Luiz Inácio Lula da Silva (PT) is working with the prospect of voting on the tax reform in the Senate between September and October, after going through the Chamber of Deputies between June and July.

The statement was made a week after the mayor, Arthur Lira (PP-AL), told businessmen that the government still has no basis in Congress to approve economic reforms.

According to Haddad, the reform designed by the government will be important for the country’s fiscal sustainability and will bring a great efficiency shock to the Brazilian economy.

“The efficiency shock that it will have on the Brazilian economy is not possible to estimate at this moment because it will be so great. There is talk of between 10% and 20% of GDP shock [Produto Interno Bruto]but we are going to make life much easier for investors, workers and public authorities with this perspective”, said the minister at an event promoted by the newspapers O Globo and Valor Econômico on tax reform and the economic challenges in Brazil.

The minister also stated that the deadlines will be calibrated for a “smooth transition”. As he showed Sheetthe collection of new taxes on consumption provided for in the reform under discussion in Congress should only begin in 2025 at the federal level and in 2027 for states and municipalities, according to the assessment of economist Bernard Appy.

The Extraordinary Secretary for Tax Reform of the Ministry of Finance is the one who coordinates discussions on the subject in the portfolio. Appy is one of the creators of one of the PECs (proposed amendment to the Constitution) under discussion in the National Congress.

In an interview with Sheet, Appy stated that the unification of taxes on consumption is the pillar of the reform. The rate, however, is the big question in the discussions and will depend directly on the sectoral exceptions to be negotiated in Congress.

The final text must be constructed from two PECs: 45, by Deputy Baleia Rossi (MDB-SP), which replaces five current taxes (PIS, Cofins, IPI, ICMS and ISS) by a Tax on Goods and Services (IBS ); and 110, from the Senate, which proposes a merger of taxes —one of the main differences in relation to 45 is that the simplification results in two taxes.

Deputy Reginaldo Lopes (PT-MG), coordinator of the working group in the Chamber that discusses the tax reform, wants the PEC to be voted on by the plenary as early as May, shortly after the delivery of the final report by Deputy Aguinaldo Ribeiro (PP-PB ).

According to the schedule, the opinion must be delivered on May 16, when the collegiate’s work is expected to be concluded.