Lira creates working group to discuss tax reform in the Chamber – 02/15/2023 – Market

The president of the Chamber of Deputies, Arthur Lira (PP-AL), formalized this Wednesday (15) the creation of the working group to discuss the tax reform, with the appointment of its 12 members and the setting of a deadline of 90 days for negotiations, extendable for an equal period if requested by the collegiate.

The theme is one of the priorities of the Minister of Finance, Fernando Haddad (PT), who is betting on the measure to improve the business environment and boost growth.

The agenda will also serve as a fire test for the government’s political articulation, at a time when the economic team seeks to undo noise and increase market confidence.

Although the need for a tax reform is a consensus among political and business leaders, there are still a series of loose threads in this negotiation, with sectors putting pressure against some of the proposals defended by the Ministry of Finance.

Even with the installation of the group, the group’s first meeting should only take place on the Monday after Carnival, on February 27th. Only then will the coordinator, deputy Reginaldo Lopes (PT-MG), and the rapporteur, deputy Aguinaldo Ribeiro (PP-PB), discuss a work schedule.

The act signed by Lira creates the collegiate and designates 12 members, one from each party — all of them men. The objective is to “analyze and debate” the PEC (proposed amendment to the Constitution) 45, presented in 2019 by Deputy Baleia Rossi (MDB-SP).

The usual procedure for a PEC is to go through the CCJ (Constitution and Justice Commission), which analyzes whether it is admissible, and a special commission, which discusses the merits of the proposal. Afterwards, it needs to be voted on in the plenary of the House in two rounds, and then goes to the Senate.

PEC 45 proposes the unification of five taxes —PIS, Cofins, IPI, ICMS and ISS— and has already passed through the CCJ and the special commission, but there was no political support from the then Jair Bolsonaro government (PL) for its advancement.

With the resumption of the agenda, Lira’s option was to set up a working group, instead of a new special commission. This expedient is used with some frequency by the president of the Chamber and follows more flexible rules.

In a commission, members are appointed according to the proportion of representatives of each party in the Chamber. There is also a regimented number of meetings to be held before voting on an opinion.

In the working group, these rules do not have to be followed. The PT, which elected 68 deputies, has a single representative, as does the PSC, which has five parliamentarians in the Chamber.

Reginaldo Lopes, who represents the PT and will chair the group, downplays these issues and claims that the maturation of the theme in Congress allows for the adoption of a faster path. “The working group has more of an articulation role, of coordinating the debates and presenting a text to the plenary with approval conditions”, he says.

As the working group does not have regulatory power and there are restrictions to amend a PEC in plenary, the consolidated text from these negotiations will need to be filed in the form of a new PEC and appended to the 2019 proposal. preference at polling time.

One of the knots to be untied by the collegiate involves the Manaus Free Trade Zone, which would have its maintenance threatened in view of the proposed unification of taxes and the extinction of tax benefits.

With only eight deputies in the Chamber, the Amazonas bench scored three nominations in the reform working group, indicating that there will be strong pressure to maintain the benefits of the Free Zone.

“The government needs to understand each other. President Lula, the times he went to Amazonas, committed himself not only to maintaining the Manaus Free Trade Zone, but to expanding the benefit. The Ministry of Finance says the complete opposite, that will put an end to tax incentives, a single tax charged at destination and not at origin, and this is the same as ending the Free Trade Zone, it could close the state of Amazonas”, says deputy Saullo Vianna (União Brasil-AM), member of the working group.

The parliamentarian defends the forecast of a presumed credit for the products elaborated in the Free Zone of Manaus — thus, they could deduct the credit from the value of the tribute to be paid.

The São Paulo bench, in turn, is represented by four parliamentarians. The state is the richest in the country and, therefore, exerts great influence in the debate.

One of the obstacles is the big cities, including those in São Paulo, which have a large source of revenue in the ISS (Tax on Services) and, therefore, resist the unification of taxes and the migration of the collection to the destination (that is, where the transaction occurs, and not at the origin, where the service provider is installed).

Deputy Jonas Donizette (PSB-SP), who has chaired the FNP (National Front of Mayors), says that the group will need to dialogue with the mayors and also with the service sector, which fears an increase in the tax burden.

“I’m going to serve as a dialogue channel. I’m going to ask the mayors to make a proposal, and I’m going to mediate the government, as I also have the role of vice-leader of the government”, says Donizette. “The intention is to make the best reform possible possible. I always remember a sentence: the best cannot be the enemy of the good. We already started with discredit, every time there was an attempt, it did not give satisfactory results”, he says.

Despite the resistance, he does not see the discussion about the ISS as something insurmountable. “The government is interested and wants to open dialogue. And it is the first year of government. The time is now, the moment is this, I think that the idea of ​​everyone wanting the reform is well matured”, he says.

The rapporteur, Aguinaldo Ribeiro, showed optimism with the approval of the proposal. “The whole strategy will be established in the conversation on Monday after Carnival. I am very optimistic,” he stated.

“We are going to establish the work plan in line with what will be determined by the president of the House, Arthur Lira, who will certainly be articulated with the president of the Senate, Rodrigo Pacheco, and with the Executive, Minister Haddad, the secretary himself [extraordinário da Reforma Tributária] Bernard Appy, so that this calendar can be defined and how we are going to work”, he said.

Lawyer Fernando Saboia, who was once assistant secretary general of the Board of Directors of the Chamber, says that a working group has more flexibility and can be more easily controlled by the president of the House, while a commission has its members appointed by the leaders of the parties and presidential election.

Committee meetings are public, while working group meetings may or may not be.

Despite the agility gain, he says he is skeptical about the delivery of concrete results by the group. “It has more chance of not working, because the parties that were not heard will always want to discuss everything again”, he says.

Donizette, in turn, assured that the group will work to provide transparency to the discussions and dialogue with the sectors and with the other parliamentarians. “This debate will not be held between four walls. The suggestions of the deputies will be welcome.”

See the names of the members of the tax reform working group

• Reginaldo Lopes (PT-MG)
• Aguinaldo Ribeiro (PP-PB)
• Saullo Vianna (União Brasil-AM)
• Mauro Benevides Filho (PDT-CE)
• Glaustin da Fokus (PSC-GO)
• Newton Cardoso Junior (MDB-MG)
• Ivan Valente (Psol-SP)
• Jonas Donizette (PSB-SP)
• Sidney Leite (PSD-AM)
• Luiz Philippe from Orleans and Bragança (PL-SP)
• Vitor Lippi (PSDB-SP)
• Adail Filho (Republicanos-AM)