Secretary of SP is against points of tax reform – 06/10/2023 – Panel

The government of São Paulo is against the creation of a Regional Development Fund (FDR) within the scope of tax reform, if it uses state and municipal tax resources.

It is also critical of the formation of a “federal council” to manage a new subnational IBS (Tax on Goods and Services).

The two proposals are contained in a report presented last Tuesday (6) by a working group of the Chamber. The text should subsidize the final project of the reform to be sent to Congress.

In an interview with the Panel, the São Paulo State Secretary for Finance and Planning, Samuel Kinoshita, says he agrees with 90% of the proposals. But he claims that the idea of ​​allocating up to 5% of IBS’ revenues to the Fund cannot penalize states and municipalities.

“Regional development is very important, but it is a mission of the Union, not of the states. Taking resources from the subnational tax does not make sense, not least because we also have a lot of poverty in micro-regions of the state of São Paulo, for example”, he says.

The secretary says that the formulation of Ribeiro’s report, that the Fund be financed “primarily” with Union resources, is not enough. “Primarily it is not enough, it has to be entirely with Union resources, which if you want you can use the federal tax”, he says.

He also criticizes the fact that the report does not specify how the Fund will be used, a definition that would be left to a complementary law.

With regard to the “federal council”, Kinoshita says he prefers tax harmonization to take place through clearinghouses, financial mechanisms that make transactions between states possible. “We are against the centralization of tax collection in a new agency”, he says.

Last Thursday (8), Kinoshita criticized the council’s proposal in a WhatsApp group with economists and tax experts, called “Taxation Economics”.

In the message, which the Panel had access to, he says: “I do not trust the federal government. Not even when I am part of it. I do not trust the federative council. Neither statically, much less dynamically. The experience of recent decades at Confaz is pedagogical,” he declared.

The secretary says that he used Confaz, which brings together finance secretaries, as an anti-example because it is a forum where there are often more disputes than convergences between states.

About not trusting the federal government, he said he was speaking in theory, not specifically the current administration. “I’m liberal. What I said is that I don’t trust the federal government even when I’m part of it,” he says.

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