Health, education and public transport may have reduced rates in the tax reform – 05/31/2023 – Market

The health, education and public transport sectors may have a reduced rate in the tax reform, said this Wednesday (31) deputy Reginaldo Lopes (PT-MG), who coordinates the GT (working group) to discuss the proposal at the Chamber.

There is also a discussion about the possibility of contemplating products related to agribusiness or food.

“We are discussing. They are cutting-edge sectors, products, activities such as health, education, which agro or food products. These are the issues that we are going to debate”, stated Lopes after a meeting with the parliamentary fronts of Entrepreneurship and Trade and Services.

“It’s a reduced rate, but I call it a balance rate. We’re saying we don’t want to increase prices, we want to improve people’s lives.”

Lopes’ statement indicates that there would be more than one rate of VAT (Value Added Tax), which seeks to replace taxes on consumption.

“Yes, I think it will be more than one [alíquota]”, said the chairman of the working group.

The establishment of a differentiated rate for health and education had been a demand from entities representing the sector. The impact on agribusiness is also pointed out as a sensitive factor in the negotiations of the proposal in the National Congress.

According to the president of the WG, goods whose production chain is “shorter” may be more impacted by the unification of taxes, as they have few tax credits to deduct in the process.

“If you have a product for which the chain is short, such as health, education, you have to look at the rate. Food, transportation… So you have to look at the rate that actually applies. [os setores] pay today in the VAT concept […]and we seek in dialogue a balance rate”, said Lopes.

The reform guidelines will be presented next Tuesday (6) by the rapporteur, Deputy Aguinaldo Ribeiro (PP-PB). The text of the substitute will be published after that, but still in the month of June, in the forecast of the parliamentarians.

According to the deputy, the forecast is to vote on the reform in the Chamber in June and “there is no divergence” about the guidelines. “We have total convergence. Nobody defends the tax system anymore [atual]”, he stated.

In addition to the differentiated rates, Lopes has already stated that the trend is for the reform to stipulate a dual VAT, with a portion of the rate representing Union taxes, and another, states and municipalities.

During the meeting with parliamentarians, Aguinaldo Ribeiro said that the reform will not promote an increase in the tax burden, but acknowledged that there is no room for cuts. “There is no way to reduce it due to the size of the Brazilian State”, he stated.