Tax reform generates disagreement among specialists on ZFM tax incentives

Manaus (AM) – The tax reform, which is about changes in the collection of federal, state and municipal taxes, sparks an alert among specialists in Amazonas. The market has expectations that the change will be positive, but there are disagreements about how it will affect the Manaus Free Trade Zone (ZFM).

The change in tax collection was presented at the end of April by deputy Aguinaldo Ribeiro (PP-PB), which provides for a new text of the Proposed Amendment to the Constitution (PEC 45/19). The preliminary proposal may go on to be voted this week, where it will be discussed with governors and representatives of the 26 states and the Federal District.

The leader of the Federal Bench of Amazonas, Senator Omar Aziz (PSD-AM), met with the Governor of Amazonas, Wilson Lima, this Tuesday afternoon (4th), to draw up strategies on how to safeguard the State’s interests in changes proposed by the tax reform, which should be voted on shortly in the Chamber of Deputies.

Tax reform

The central focus of the proposed reform of the Brazilian taxation model is the way in which taxes will be applied to goods and services in the country, but this does not mean that there will be an increase in the tax burden.

With the reform, the five taxes on consumption that are in force will then be extinguished: Tax on Industrialized Products (IPI), Social Integration Program (PIS), Contribution for Social Security Financing (Cofins), Tax on Circulation of Goods and Services ( ICMS) and Service Tax (ISS). In their place, according to the proposal, two value-added taxes (IVAs) will be created: the Tax on Goods and Services (IBS), replacing ICMS and ISS, and the Contribution on Goods and Services (CBS).

The amendment proposes that there be only one tax rate. Some specific groups of goods and services would pay 50% of the total, such as urban, semi-urban or metropolitan public transport services; medicines; medical devices; health services; education services.

“We will have two funds: The Tax Benefits Compensation Fund and the Regional Development Fund (FDR) and a Federal Council for the Tax on Goods and Services, which will be created with the aim of carrying out shared management by states, the Federal District and municipalities. , that is, managing the Tax on Goods and Services (IBS), which will replace the ICMS (state) and ISS (municipal)”

explains doctor Michele Aracaty, economist and specialist in Regional Development and professor at the Department of Economics at the Federal University of Amazonas (Ufam).

The economist explains that the current tax model has been in force for more than four decades and that “It is confusing, costly and unfair, as it taxes consumption, impacting mainly low-income taxpayers. We have federal, state and municipal rates, hundreds of acronyms and cascading charges. ”

However, the exemption of these applied taxes can directly affect ZFM companies by replacing the same taxes. One of the alternatives studied to compensate for the end of the IPI, from which the ZFM was exempt, is that the Selective Tax (IS), created by the reform, taxes goods manufactured in other regions of the country, which are also produced in the Manaus Free Trade Zone.

Manaus Free Zone

In 2022, ZFM’s revenue reached BRL 174 billion, an increase of almost 7% compared to the previous year, according to data from the Government of Amazonas. Exports totaled R$ 3 billion and it is estimated that 700,000 direct and indirect jobs will be generated.

To the IN TIMESenator Omar Aziz highlighted during a meeting with Wilson Lima that the tax reform cannot harm the Manaus Free Trade Zone or the Amazonians, hence the need to bring together parliamentarians and the governor to align the most important points in defense of the State .

“We are firm in defending our economic model that generates hundreds of thousands of jobs and helps preserve our forest. I will talk to Minister Haddad and reaffirm the commitment aligned with the bench, the search for more investments and for the development of Amazonas”

declared Umar.

In a statement, the Brazilian economist, lawyer and politician, Serafim Corrêa, declared that the reform is still “very hazy” in relation to the Free Trade Zone and which is in the process of construction and discussion, in the sense that it preserves the competitiveness of the companies installed in the Industrial Pole of Manaus (PIM).

“Strictly speaking, we don’t even have the text that will be voted on. There is a great discussion behind the scenes and I even think it is very difficult for it to be voted on until Friday. On the other hand, it is not possible to generate terror by saying that there will be layoffs. It’s not that. This is a discussion process in formation. I particularly disagree with the direction of tax reform. I think it will make what is already very bad worse.”

he stated.

Serafim alleges that the reform “it will make worse what is already very bad” and that better results would be obtained if the administrative tax process were unified nationally.

“In my opinion, we would have better results if we unified the administrative tax process at the national level and made a single ICMS legislation valid for the 26 and the Federal District, a single ISS legislation valid for the 5.6 thousand municipalities and the merger of the PIS with COFINS at the federal level. These four measures would be much more effective than all this confusion that they are causing in the lives of people and companies”

highlighted.

In the evaluation of doctor Michele Aracaty, the reform can be evaluated from a positive point of view for the PIM. Aracaty believes that the new reform will increase the pace of the economy and leverage the labor and employment market, as it will make companies more competitive in the macroeconomic scenario.

“I cannot see the tax reform as the villain and cause of dismissal in the labor market for workers in the Industrial Pole of Manaus. We have already faced many crises and have followed a successful and uninterrupted model for more than five decades. We will adapt after the final text is approved.

After approval of the final text of the Tax Reform, each sector will adjust and become competitive in this new moment in the country. We should not see the Tax Reform as something negative for the economy, on the contrary, it will improve the competitiveness of companies and give more dynamism to the labor market and employability”

claimed the economist.

fight for rights

In defense of the Free Zone, the government of Amazonas and state parliamentarians continue to elaborate proposals and dialogue on the subject. The governor of Amazonas, Wilson Lima, this Tuesday (4th), reinforced that the reform being discussed in the Federal Chamber needs to provide guarantees that the economic model that currently employs 500,000 people in the state will be preserved.

“The Manaus Free Trade Zone is our main economic activity, hence the commitment that our government has with these companies that generate employment, that generate income, that generate opportunities. And we now have the tax reform process, which is something that worries us and we have been very attentive, participating in discussions in Congress and also with the Federal Government so that the competitiveness of these companies is maintained”

highlighted Wilson Lima.

Wilson Lima held several meetings in Brasília with the federal bench and this Wednesday (05), the governor will be with the Minister of Finance, Fernando Haddad, so that Amazonas can present his point of view on the guarantee of competitiveness of the PIM, including state revenue.

After several technical analyses, the Amazonas Industry Center (Cieam), sent the group of deputies of the Legislative Assembly of Amazonas (Aleam) contributions to change the text presented.

The entity, which represents the interests of companies installed in the Industrial Pole of Manaus, which guarantees the constitutional prerogatives of the ZFM and, at the same time, wants to support everyone’s efforts in building a modern tax system, contributing with the Working Group of Tax Reform of the Chamber of Deputies.

“In addition to maintaining PIM’s competitiveness, the jobs generated and the well-being of the population, we want to continue contributing to the diversification and expansion of the region’s economy, focusing on its potential”

reinforces the president of the Superior Council of the entity, Luiz Augusto Rocha.

The proposals focused on maintaining the IPI transition appropriate to the constitutional term of the model; in the differentiated treatment in VAT (Federal, Subnational) in line with those existing in ICMS, PIS+COFINS.

The federal deputy from Amazonas, Sidney Leite (PSD), who was part of the reform working group, defended the dialogue on the subject between the parliamentarians and the government. Sidney indicated that “there has never been any unwillingness to maintain the incentives”. “The Free Zone is responsible for shaping the entire dynamics of the region”says the parliamentarian.

As an alternative to publicize the work currently carried out in the ZFM, Suframa started to carry out the project “Suframa in Universities”, aiming to disseminate information about the importance of the ZFM to university students and reinforce the defense of the idea that has been successful for over 50 years and which is an example of socioeconomic and environmental development for the region and the country. The superintendent of the superintendent, Bosco Saraiva, during the lectures, passes on important information about the history of Suframa and ZFM and the importance of both in economic, social, environmental and technological aspects. Another program that follows the same line and the “Suframa in Schools”.

“We need to continue investing in the region’s intellectual development, as the Free Zone is all we have. It is not new that foreigners have their eyes on here, because, in addition to 110,000 direct jobs and around 400,000 indirect ones, we have the planet’s pharmacy with our bioeconomy. We need to spread this out and defend a victorious project, which belongs to all of us”

highlighted Bosco Saraiva.

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