Haddad says the text of the tax reform is “not perfect”, but guarantees a “leap in quality”

Highland

Minister of Finance met this Thursday morning (2), with senator Eduardo Braga (MDB), rapporteur of the Senate’s tax reform

Brasilia DF) – The Minister of Finance, Fernando Haddad, stated this Thursday (2) that the text of the tax reform being processed in the Federal Senate is not perfect, but that its approval by the end of the year could mean a “leap” in quality in the Brazilian tax system.

“Nothing is perfect, but in light of what we have, the leap we will take compared to the current tax system is invaluable. We will be among the good tax systems in the world. All of this has a short-term effect on expectations, on investment decisions in Brazil, but it has a medium and long-term effect that will impact economic growth and reduce the burden on the judiciary”,

stated the minister.

Haddad met, this Thursday morning, with senator Eduardo Braga (MDB), rapporteur for the Senate’s tax reform.

At the meeting, participants evaluated recent requests for changes and technical aspects subject to judicialization, point by point. The meeting included the participation of members of the Ministry of Finance’s technical teams and Senator Braga’s team.

To journalists, the Minister of Finance also said that the rapporteur was very attentive to the demands of the federal government and that the text must be approved in the Senate with a “good majority”.

“I cannot get ahead of the rapporteur, because he is being very generous with us, discussing point by point. But we are very sure that the report is well done and we will have, God willing, a good majority in the Senate, and that it will be possible to promulgate the constitutional amendment this year”,

highlighted Haddad.

Regarding the amendments accepted by Braga, Haddad said that the ideal would be for there to be fewer exceptions in taxation, but that the important thing is the approval of the reform.

“The fewer exceptions, the better for the country. But the burden will fall for most sectors. We want to promulgate the constitutional amendment this year”,

said the minister.

The minister estimated that the exceptions in the current text should increase the annual base rate by half a percentage point.

“In relation to the version that came out of the Chamber, it increases (the standard rate) by around half a point. It doesn’t reach 28%. As the exceptions expanded, it increases by about half a point. We gave this estimate to the Senate technical team. We are providing transparency in everything”,

pointed out the minister.

Initially, the Ministry of Finance’s forecast was that this percentage would be between 25% and 27%. If it exceeds 28%, the Brazilian base rate could be one of the highest in the world — which the government wants to avoid.

After the meeting, Eduardo Braga stated that the Regional Development Fund (FDR) will remain at R$60 billion.

“The value of the fund remains at R$60 billion. The reform is on schedule, I believe it will be approved in the first and second rounds”, said Braga.

“We guarantee a constitutional lock. Taxes will be reviewed every five years. We will have small adjustments, some editorial, to have more legal certainty. Everything is on schedule,” he added.

Processing

The tax reform rapporteur, Senator Eduardo Braga (MDB), presented his opinion on the matter to the Senate’s Constitution and Justice Committee (CCJ) at the end of October.

The text is expected to be analyzed by the collegiate between Tuesday (7) and Wednesday (8) next week. If approved by the collegiate, the reform goes to the Senate plenary, where approval depends on the favorable votes of 49 of the 81 senators, in two rounds of voting.

As the matter originated in the Chamber and underwent several changes in the Senate, deputies will have to analyze the text once again to decide whether or not to accept the changes proposed by the senators. It is expected that shipping to Casa Baixa will take place by the 10th.

*With information from CNN

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