Tax reform maintains lower rate for lawyers – 12/15/2023 – Market

After days of impasse, the tax reform rapporteur, deputy Aguinaldo Ribeiro (PP-PB), presented this Friday afternoon (15) the opinion that formalizes the changes agreed with leaders of the Chamber and Senate, paving the way for the vote on the proposal.

“Even the divergence is agreed,” said Ribeiro, jokingly — a contrast to the tension of the meetings that preceded the report’s conclusion.

In the changes, the rapporteur excluded five groups of activities from specific regimes, which will be outside the new VAT (Value Added Tax) and will have their own taxation rules.

Sanitation and highway concession services, air transport, operations involving the provision of the shared structure of telecommunications services, circular economy and operations with microgeneration and distributed minigeneration of electricity (which includes solar panels and farms) were withdrawn.

On the other hand, Ribeiro maintained the intermediate rate, equivalent to 70% of the standard, for independent professionals such as lawyers, engineers and other regulated professions.

The government leader in the Chamber, José Guimarães (PT-CE), said that maintaining this lower rate for liberals was a request from the president of the Senate, Rodrigo Pacheco (PSD-MG).

The pivot of one of the main differences between the two Houses, the charge of Cide (Contribution on Economic Domain Intervention) on goods with similar production in the Manaus Free Trade Zone was also excluded from the rapporteur’s text.

The rapporteur in the Senate, Eduardo Braga (MDB-AM), defender of the Free Zone, agreed with the change because the wording of the PEC (proposed amendment to the Constitution) approved in the Senate guarantees the maintenance of the current IPI (Tax on Industrialized Products) for protect the region’s industry if Cide is not implemented.

The assessment of technicians and parliamentarians is that, with this, it is possible to overturn the Cide charge, maintaining the incidence of the IPI just to preserve the incentives for the Free Zone.

The impasse had arisen because states in the South and Southeast regions disagreed with the section of the PEC that stamped Cide’s collection for the Amazonas fund. The IPI collection, in turn, is distributed between the Union, states and municipalities.

“In view of the strong rejection of the idea of ​​taxing the other units of the federation with a Cide, with the aim of increasing the competitiveness of the Amazon region, and also directing the resources of this tax to the same region, a consensus was reached to change the ZFM benefit model [Zona Franca de Manaus]maintaining the region’s competitive advantage with the use of IPI and not Cide”, says the report.

According to Ribeiro, the maintenance of the IPI will only be for goods with equivalent production in the Free Zone.

“We have built the necessary solutions to deliver, God willing today, on a historic day, the tax reform of our country, which brings more simplification, more transparency, more justice, less cumulativeness, more legal security and, above all, that puts us in another country level in relation to the tax system”, he stated.

In the reduced rates, Ribeiro also eliminated the possibility of a 100% reduction in the rate on the acquisition of medicines and medical devices by non-profit social assistance entities.

He also cut the so-called extended basic basket. Only the so-called National Basic Basket approved by the Chamber will be maintained, a more restricted list of items that will have a 100% discount on the new VAT (Value Added Tax) rate.

For Ribeiro, any additional need to mitigate the effect of the reform on families’ pockets could be resolved via “cashback”, a tax refund mechanism for low-income consumers.

The rapporteur also excluded the article that extended the salary ceiling practiced in the Union to fiscal auditors from states and municipalities (R$ 41,650.92). Today, the salaries of these employees are capped at the salaries of governors and mayors, respectively, which are lower amounts.

The measure was included by the Senate as a nod to the category, which would be the only one of states and municipalities with such benefit. Despite the exclusion, the MDB will present a highlight in an attempt to include the text again, but will need to gather 308 votes to be successful.

The provisions that give the Senate powers to define the rate of new taxes on fuel and to examine and approve the name of the president of the IBS (Goods and Services Tax) management committee were also removed. The board will be responsible for collecting and distributing tax resources that will replace the state ICMS and municipal ISS.