Tax reform may have pink cashback to return tax to women – 06/04/2023 – What is this tax

The tax refund mechanism foreseen in the tax reform can also benefit women, in a kind of “pink cashback”.

Representatives of the federal government and deputies who deal with the subject have already spoken about the possibility of returning taxes on the basic food basket for poorer people. Or benefit some families that have private health and education expenses.

This week, the coordinator of the Chamber’s working group that deals with the reform spoke about the possibility of also extending the mechanism to women, who bear a greater burden in indirect taxes on consumption.

Some products with the same functionality have higher prices when they are made in versions for women. Even if taxation is the same in percentage terms, it will fall on a higher base on the product for the female audience. In addition, women spend a larger share of their income on subsistence-related items, which are currently taxed more.

“I am extremely in favor of refunding taxes for the poorest. Even a pink cashback, because unfortunately women’s products are even more expensive”, said deputy Reginaldo Lopes (PT-MG) during a public hearing in the Chamber of Deputies with Minister Simone Tebet (Planning).

“When we talk about [devolução de imposto de] food, already serves the vast majority of the poorest population, which unfortunately are black people and mostly women. But there is also a debate, if the country wants to make the decision, it can create, for example, differentiated cashback even for women in some products, pink cashback”, said Lopes during a seminar on the Impacts of Tax Reform on Health.

Report by Sheet last week showed that women are still in the minority in discussions about tax reform in Congress this year, despite paying more tax on consumption than men and having participated in the elaboration of the proposals being debated today.

A study by the Instituto de Justiça Fiscal with data from the Federal Revenue Service shows that women have less exempt income and, therefore, pay higher rates on their income. They also bear a greater burden in indirect taxes on consumption, 15.05%, higher than men (14.55%).

The study “Tax reform and gender inequality: contextualization and proposals”, by the Taxation and Gender study group at FGV, also showed that women spend a greater portion of their income on consumer goods, aimed at maintaining the family, and a part less of the income goes to investments and asset growth, such as real estate acquisition.

In this first semester, the government wants to simplify and replace the five main taxes on consumption (federal PIS, Cofins and IPI, state ICMS and ISS) by up to three new taxes, with unified legislation.

There should also be a change in taxation from the location of the company’s headquarters to the consumer’s municipality, redistributing the collection. Taxation of all goods and services tends to be the same, with some exceptions that are under analysis, such as food, health, education and transport.

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