Tax reform approved by the Chamber provides for cashback, but details still need to be defined

Tax reform

Regulation must occur by means of a complementary bill, including the determination of the public to be benefited, the amounts and the operating mechanism itself

The tax reform approved by the Chamber of Deputies this past week provides for a kind of refund of part of taxes to taxpayers. This return is called cashback.

However, details still need to be defined, such as the beneficiary public, values ​​and the operating mechanism itself. The expectation is that this will be done later through a complementary bill.

The Proposed Amendment to the Constitution (PEC) of the approved reform says that the future law will establish the “hypotheses of refunding the tax to individuals, including limits and beneficiaries, with the aim of reducing income inequalities”.

In an interview, the Extraordinary Secretary for Tax Reform at the Ministry of Finance, Bernard Appy, said that he intends to debate with states and municipalities, throughout the second half of the year, the regulation text of the points still left open by the reform, such as the cashback rules and the Value Added Tax (VAT) rate.

Appy spoke of sending to the National Congress at the opening of the legislative year of 2024, in February, the complementary bill that regulates these points.

The intention of the federal government and the rapporteur, federal deputy Aguinaldo Ribeiro (PP-PB), is that the cashback mechanism serves to help reduce socioeconomic inequality in the country.

The leader of the government in the Chamber, José Guimarães (PT-CE), said it was a “return for the little ones”.

“The person will be able to receive a small refund. This includes those people who have no income and who have no assets in the productive process and in the process of national reconstruction”,

declared.

PT deputy Rubens Pereira Júnior (MA) compared cashback with the Income Tax refund system.

“In the Income Tax declaration, there is a cashback of the expenses that are declared in health and education. This serves a part of the middle class. This caters to the elite. I want cashback to serve the poorest people. The proposal for this tax reform provides for more cashback, especially for those who need it most”.

Some banks also already apply cashback to credit card account holders. Whoever pays the card bill by automatic debit has the possibility of receiving an amount back in the current account, for example, in some institutions.

Still according to the text of the reform, the refund of the money is foreseen by the CBS (new federal contribution that replaces the PIS/Confins) and the IBS (state and municipal tax that replaces the ICMS and ISS).

The federal government is studying how to refund part of the taxes.

The Extraordinary Secretary for Tax Reform at the Ministry of Finance, Bernard Appy, has already mentioned that one of the ways being considered is for the consumer to receive a discount as a form of return when paying for the product.

To work, this would depend on a technological tool capable of deducting “live” the money in the CPF account that made the purchase.

Other possibilities would be the return through a current account, Pix or even the alternative of cashback credit being added to some social benefit, such as Bolsa Família.

*With information from Fernando Nakagawa, from CNN