Opposition talks about leaving voting for August

The lack of agreement on aspects of the tax reform and the opposition of various parties and parliamentarians once again postponed the discussion of the Tax Reform by the plenary of the Chamber of Deputies. Since last Sunday, parliamentarians have been summoned to Brasília by the President of the House, Arthur Lira (PP-AL), to try to approve the text before the July recess.

The invitation to come to Brasília to discuss a text that impacts the economy on Sunday, inclusive, was considered a “disrespect” by the leader of the opposition in the Chamber, Carlos Jordy (PL-RJ). He said that he suggested to the leader of the PL, Altineu Côrtes, that the party declare obstruction to the week’s votes, to try to postpone at least the Tax Reform. The agenda for the week also includes the amendments that the Senate made to the fiscal framework and the casting vote by the Administrative Council for Tax Appeals (Carf).

According to the opposition leader, there is an understanding that a large part of the PL deputies will be against the Reform, especially after former President Jair Bolsonaro criticized the reform, saying that it was “a punch in the stomach of the poorest”.

The former president asked people to speak with their deputies not to vote on the matter, which he considers harmful mainly for the most needy population. A survey by the Association of Supermarkets (Abras) indicated that the basic basket products would be increased by 60% with the tax changes that could be implemented by the reform.

In the race against time to vote on the text, several deputies expressed dissatisfaction with the proposal, citing that in addition to penalizing the neediest population with tax increases, it will directly impact sectors such as services and commerce.

Sources heard by People’s Gazette say that the mayor, Arthur Lira (PP-AL), one of the main drivers of the proposal, will not risk voting on the reform without having a guarantee that the text will be approved. This Tuesday’s session, like the one on Monday, did not advance in the analysis of the defined agendas and the negotiations continue in Brasília. The attempt is that the agreement can be made at least to unlock the agenda, with the vote on the Carf quality vote project, but the reform may even be left for the second half.

As it is a Proposed Amendment to the Constitution (PEC), the text needs at least 308 votes in two rounds of voting, but some congressmen consider that the ideal would be to have at least 40 more votes to guarantee a safe margin of approval.

Wednesday’s deliberative session was once again convened, scheduled to start at 1:00 pm, which does not mean that there will be votes, as occurred on Monday and Tuesday. The day should be one more dedicated to attempts at negotiation and agreement.

At the end of this Tuesday night, the president released a note stating that he continues to listen to governors, mayors and businessmen, in search of a consensus to vote on the tax reform until Friday. The note says that “together with the party leaders, President Lira is convinced that he will reach consensus to put the Tax Reform proposal to be voted on by Friday”.

Lawmakers criticize rush to vote

Deputy Bia Kicis (PL-DF) said that “we can easily wait for the second semester to discuss the text”. Colleague Nikolas Ferreira (PL-MG) said that the PL would obstruct the proposal that is “More Brasília and less Brazil”, and said that, like many, he wants a reform, as long as it is discussed and not carried out ” box tap”.

The reform foresees, among other points, the replacement of taxes such as IPI, PIS, Cofins, ICMS and ISS by a Contribution on Goods and Services (CBS), managed by the federal government, and a Tax on Goods and Services (IBS), which should be managed by states and municipalities.

Governors are in Brasilia to debate the tax reform proposal

In a meeting with the block formed by the MDB, PSD, Republicans and Podemos, the rapporteur for the matter, deputy Aguinaldo Ribeiro (PP-PB) and also leader of the majority in the House, said that the text was much debated with society, sectors of the economy , states, mayors and ministers, and that “this is not a reform of the left or the right, it is a reform of Brazil”.

But the fact is that there is still a long way to go before reaching a consensus on the PEC. Throughout Tuesday, parliamentarians, governors, mayors and representatives of society circulated through the corridors of the Chamber of Deputies, and even participated in numerous meetings with benches and states, held in different parts of the federal capital.

At least ten governors were in Brasília this Tuesday. The one from Rio Grande do Sul, Eduardo Leite (PSDB-RS), told the People’s Gazette that a worrying point concerns the federation, and that he believes that the reform needs more time, but that it is a “progress that the text is under discussion”. The governor of Goiás, Ronaldo Caiado (União Brasil – GO), one of the main voices against the proposal presented by Aguinaldo Ribeiro, highlighted that he is worried about the loss of state autonomy.

To try to accommodate the requests of the governors, Ribeiro said that he must review at least three points: the rules for the creation of the Federative Council, which will be responsible for the management and distribution of IBS resources, which will combine ISS and ICMS; the Regional Development Fund, which would rely on Union resources to compensate for the loss of tax benefits granted to companies by the states, such as tax exemptions; and the timeline for the implementation of the IBS.

“There is a political demand to make this clearer. In the federative council, we will have to have parity, we are designing the best way to do this. The transition (for the implementation of the IBS) we are calculating and agreeing with all the states. We already had one political commitment to discuss these points. We will try to make the convergence between the states possible”, said Ribeiro, rapporteur of the reform.

Agro bench says it will not support text that is against producers

The leader of the PP, André Fufuca (MA), said that there is still no agreement to vote on any of the economic projects, but denied a possible obstruction by the party. He recalled that the reform also faces resistance from the agro and that there is no forecast for it to be voted on.

The president of the Agricultural Parliamentary Front, Pedro Lupion (PP-PR), in turn, said that the bench presented to the proposal’s rapporteur “the points that are non-negotiable”. “We do not accept a reform that is against the producers. We will not support a text that does not suit us”.

CARF project also faces resistance

In addition to criticism of the tax reform, the government is facing another problem in moving forward in the discussion of the economic guidelines it intended to approve later this week, before the start of the parliamentary recess of the National Congress, on July 17th.

The plenary agenda is blocked by the bill that restores the casting vote of the Administrative Council of Tax Appeals (Carf), the body that judges tax disputes between the government and taxpayers on taxes. Due to a law passed in Congress in 2020, disputes that end in a tie in Carf benefit the taxpayer. But the government wants to change the rule, according to the rapporteur, Deputy Beto Pereira (PSDB-MS), so that the vote benefits the Union, and thus, there is greater collection for the public coffers. According to him, these processes represent only 1.5% of the total demands being processed by the Council, but deal with “exorbitant” amounts.

The fact is that in addition to encountering resistance, as many congressmen claim that the current rule was made on the initiative of parliament, the project is “locking up” the agenda of the Chamber. Therefore, while it is not appreciated, deputies cannot advance in the analysis of other economic issues, such as the Tax Reform and the changes made by senators to the text of the fiscal framework.

According to the leader of the opposition in the Chamber, Carlos Jordy, even if many opposition deputies declare that they will vote against Carf, he believes that the proposal will be approved, but that the same should not happen with changed points of the fiscal framework, such as the Constitutional Fund of the Federal District, which must obey the limit of 70% of the spending ceiling to remain in the text.