Lawyers explain points of the Tax Reform to representatives of the Amazonas Industry

Manaus (AM) – Translate the terms, resolve doubts and understand the complexities of changes in the new Brazilian tax system. It was with this objective in mind that this Thursday (17th), at the Auditorium of Senai Arivaldo Silveira Fontes, at Avenida Rodrigo Otávio, 2394, Distrito Industrial I, South Zone of the capital, the lecture “Tax Reform Unveiled”.

The event was held by the Federation of Industries of the State of Amazonas (Fieam) and the Union of Metallurgical, Mechanical and Electrical Material Industries of Manaus (Simmmem), together with the Marchiori Sachet, Barros & Dias office and aimed to present, debate and answer questions from representatives of the sector about the Tax Reform. During the opening, the vice-president of Fieam and president of Simmmem, Nelson Azevedo, spoke about the urgency of the matter:

“Our country faces an economic crossroads, in which the modernization of the tax system becomes vital to boost our global competitiveness. The current complexity impedes the healthy growth of companies and undermines our ability to attract investments”,

stressed Azevedo.

Tax law specialist and one of the firm’s partners, Geraldo Vinícius dos Santos, spoke about how Brazilian tax changes take time to be discussed and implemented after the country’s redemocratization process and the 1988 Constitution.

The lawyer recalled that only the ICMS, for example, was only regulated eight years after the Constituent Assembly. And since then, the tax has undergone three significant changes, in the time interval of 10 and 15 years between one and the other. Geraldo also warned that the reform is still going on and that several proposed changes could affect the model of the Industrial Pole of Manaus.

“The Reform reached the Senate on August 3rd. Since then we have had 55 amendments, some of which may harm the Free Zone”. For the jurist, it is essential to maintain vigilance to protect the model. César Tadeu Dias Júnior explained that the country’s tax conflicts are old and the result of the political moment in which the Constitution was drawn up. Due to the rush for the Magna Carta to be implemented, many details of the Brazilian tax system were postponed and left to Complementary Laws, many of which have not even been enacted to this day.

One of the most important debates for the Manaus Free Trade Zone turned out to be the Tax on Industrialized Products (IPI), which took years to happen and only advanced after the evaluation of the country’s supreme court.

“In the beginning, not even the concepts of inputs and circulation of goods were established, which took the debate to the judiciary. The STF began to judge and settle these issues, partly in favor of the taxpayer, partly in favor of other economic sectors”,

recalled Days.

About the current Reform proposal, the jurist warned that the Ministry of Finance has not yet disclosed the impact of the tax burden with the new reform.

“The discourse is to simplify, but maintain the current tax burden, but there is no guarantee of that”,

affirm.

Dual VAT and Selective Tax

The team of lawyers also explained the concept of Dual VAT and Selective Tax, central elements of the Tax Reform. About Dual IVA, the initial idea was to unify PIS, Cofins, ISS. However, the idea did not move forward because it violated the federative pact. As a result, the alternative of creating the CBS (for federal taxation) and the IBS (for municipal and state taxation) arose.

The lawyer and master’s student in Tax Law, Luiz Fernando Sachet, warned of a risk that the Selective Tax offers, of not being established by law, but rather by determination of the federal government, which can increase or decrease rates with simple decrees, which can cause legal uncertainty and increase the tax burden of various sectors. That’s because, depending on how this selective tax is taxed, it can range from fuel to telecommunications, two key elements for the industry.

destination of the collection

One of the major complaints from municipal managers is the allocation of resources provided for in the reversal of the collection of destinations, something that the Tax Reform promises to change. César Dias explains that this situation will require great care, because once the ICMS and Cofins are unified, it will be a challenge to distribute the destination of the resource if two municipalities have two different rates of final destination.

“Imagine, for example, if the tax rate in Manaus was 5 and that in Manacapuru was 2. Now imagine more than 5 thousand municipalities”,

warned.

Luiz Fernando Sachet complained about the lack of basis for simulating projected rates for IBS and CBS, which were initially forecast at 27% and 9.05%, respectively. The problem is that this estimate is initial, before the procedure in Congress, where it can increase even more. “There is still a lot of uncertainty about how much this rate will be”, he lamented.

Another point to be observed is the possibility of credit to offset the impact of the IBS and CBS rates on the payroll. Although the argument is that it will be small precisely because of this credit, the jurist says that the consequence of this is the increase in outsourcing of services, especially in the Manaus Free Trade Zone, precisely because of access to this credit.

“The states, when granting tax incentives, ask for counterparts in the form of funds. But these incentives make up the state budgets. If there is a drop in the collection of these counterparts, the state budgets will fall”, recalled William Barros Cunha, from the Taxation Department of the Amazonas Treasury Department (Sefaz-AM), also present at the event.

Amazon Sustainability Fund

It was also explained how the so-called Amazon Sustainability Fund should work, a mechanism used to compensate for losses with the end of the IPI. This fund aims to encourage the development and diversification of the state’s economic activities and which will be established by means of a Complementary Law and constituted with Union resources.

The problem, according to Sachet, is the lack of information on how these funds will be defined. “It is defined by the Tax Reform, but its details will not be in the Constitution”, he says.

The lack of details about this fund makes it difficult to know whether its application will make Amazonas earn or lose revenue. “This fund is conditional on waivers by the state itself,” he lamented. The lawyer claims that the states are supporting the Tax Reform even if it removes the ICMS collection because they believe that these funds created for development will pay off.

Attention points

At the end of the lecture, the jurists listed the main points of attention for the final processing of the Reform. Among them are the increase in the tax burden for the service sector and outsourcing, in addition to the possible reduction of products that make up the basic basket (due to the excise tax).

The complexity of the Simples Nacional should also grow due to the transitional period of the Reform. “In principle, the idea is to simplify from five taxes to two, but by 2032 there will be seven. For some time, other tributes will coexist with each other”, evaluates Sachet.

Finally, the lawyers warn of the risk to the right to maintain the credit arising from the entry of goods and services into the ZFM, as the exemption and non-levy will not last for the right to the credit. “And there is still a risk that the transition period for these taxes will be extended”, he says.

Another important element is the creation of the Federative Council, which will be created to manage state and municipal resources. “As of the Reform, the funds raised will not go directly to the states, but to this council. He will define the destination of that money”, explains Sachet.

Tranquility

Despite the lawyers’ warnings, the representative of the Finance Department of Amazonas, William Barros Cunha, sent a message of tranquility and optimism to the industry representatives present at the event. He guaranteed that the state government will be attentive to the movements of Congress. “The idea is to make our collection remain as it is”, he guaranteed.

*With advisory information

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