Senate Commission suggests new exceptions in Tax Reform – 10/19/2023 – What tax is this

The working group that analyzed Tax Reform in the Senate’s Economic Affairs Committee suggested giving favorable treatment to self-employed professionals, the service sector in general, labor-intensive companies, companies that deal with the green economy and public service concessions, such as sanitation, energy and highways.

The group’s suggestions were released this Thursday (19) at a committee meeting. Some were presented in the form of amendments that will be analyzed by the Senate reform rapporteur, Eduardo Braga (MDB-AM).

More than 500 amendments have already been presented to the proposal, many in the last two days. The rapporteur has already analyzed more than 300 suggestions made by senators.

The group also wants the Union to participate in the council that will manage the tax allocated to states and municipalities in the Tax Reform, but only when there are matters that also affect the new federal tax.

Some suggestions made by the working group:

• Ceiling for the power to tax consumption: limit as a percentage of GDP in 2023
• Limitation for the Selective Tax (the so-called sin tax): does not cover electricity, telecommunications, petroleum products, fuels and minerals; will be non-cumulative and single-phase
• Inform the tax paid by the taxpayer on the invoice
• New contribution on primary and semi-finished products (article 19): maintained for the hypotheses that exist today until 2032 (end of the transition) and not 2043 (deadline approved in the Chamber)
• Federative Council: Union participation on an extraordinary basis only in common matters in relation to new taxes (CBS and IBS)
• Litigation: Dispute resolution system; define judicial jurisdiction for the two taxes
• Collection transition: reduce term from 50 years to 30 years
• New criteria for distributing resources between entities
• Increase in income insurance from 3% to 4% of revenue
• “Spit payment”: immediate compensation of the tax incurred in the previous stages; except when immediate collection of tax is possible
• Assessment of tax treatment for independent professionals, service sector, labor-intensive companies, green economy with sustainable use of natural resources and public services granted and delegated by the public sector with economic repercussions of the tax on the value of tariffs charged to the final consumer

See here the documents presented by the GT at the Senate CAE

Present at the presentation, Braga stated that his report will be presented in the coming days. According to him, the new text needs to be presented at the CCJ by November 1st so that it is possible to approve the reform in the Senate Plenary and again in the Chamber later this year.

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