‘Perfume pays more tax than cologne’: what’s at stake with the tax reform that could serve as a flag for Lira

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Text would replace five taxes with the IVA model, to simplify payment for companies. There is still no prediction of what the tax amount will be, but it is estimated that it may be one of the highest rates in the world. The president of the Chamber of Deputies, Arthur Lira (PP-AL), said on Sunday that the vote on the PEC on the tax reform should not go beyond this Friday (7). The text proposes a single charge, which would replace five taxes, with the IVA model (Value Added Tax – understand what it is), in addition to a lower rate for health, education and basic food basket, “cashback” and IPVA for jets, yachts and speedboats . The argument for carrying out the tax reform is that the proposal would simplify the excess of rules for the payment of taxes by companies. Tax reform: see the main points of the rapporteur’s proposal Deputies analyze proposals in the Plenary of the Chamber of Deputies. MyKe Sena/Chamber of Deputies Source: Câmara de Notícias Agency “When you put together all the rules of the entire country in one single rule, it makes life much easier. Today companies have hundreds of people taking care of this tax payment. rule, which makes this organization more difficult”, defends Manoel Ventura, reporter for the newspaper “O Globo” in Brasília. “Brazil is, historically, the country that takes the most time to pay taxes because of these very extensive rules.” Under the new rule, specific products would pay the same tax to circulate in the market, which currently does not happen with the lobbying of sectors with the government. “In Brazil, perfume has a tax of 27.3%, but cologne has a tax of 7.8%”, he exemplifies. “If you see a perfume called eau de cologne, it’s simply because it’s cheaper to pay tax on eau de cologne than on perfume or some other popular product.” How much will the tax be? The proposal under discussion in the Chamber still does not have a forecast of what will be the value of the implemented in the IVA model – one of the criticisms of the tax reform. “This and other details will only be defined in the future, after the reform is approved.” The Ministry of Finance is making calculations based on the premise of not increasing or decreasing the tax burden in general, but the forecast is that the increase in the rate will go to 25%, which should overload the service sector and reach the middle class, main consumer of services in Brazil. If a 25% rate is confirmed for future VAT, the tax would be one of the highest in the world. “The Ministry of Finance counters and says that there are a series of compensations that will be made. But the fact is that it is natural to imagine that there will be a significant increase in the load for the service sector and those who consume.” Lira’s maneuver Arthur Lira MARINA RAMOS/CHAMBER OF DEPUTIES Lira’s effort to approve the tax reform this week is a sign that the mayor wants to make the matter a kind of flag of his second term. “He took the lead in this discussion and is negotiating directly with the governors to reach an agreement in favor of the reform.” Listen to the full interview on the podcast O Subject Previous episodes What the squad’s squad for the World Cup says about the moment for women’s football in Brazil How Brazil deals with the influx of refugees and what can be done to improve

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