Tax reform: RJ will not fight for demand from SP – 07/04/2023 – Market

The governor of Rio de Janeiro, Cláudio Castro (PL), said this Tuesday (4) that the state will not fight for a decentralized collection model in the tax reform, with a clearing house between the state governments to transfer the resources collected in the new IBS (Tax on Goods and Services).

The proposal has been one of the main demands of the governor of São Paulo, Tarcísio de Freitas (Republicans), who sees in the Federative Council an affront to the autonomy of the states to collect their taxes.

In the text of the reform’s rapporteur, Aguinaldo Ribeiro (PP-PB), one of the tasks of the collegiate would be to centralize the collection of the IBS and distribute resources to states and municipalities. São Paulo resists this model and wants to maintain control over the collection of taxes and then pass on the part that belongs to other entities.

“This is a demand very much from São Paulo, which Rio has solidly supported, but we don’t see any big problems either [em abrir mão]. If it is a logic that everyone understands to be positive, Rio will not fight for it”, said Castro, when asked by journalists about the possibility of giving up the immediate collection to maintain the Federative Council.

Castro participated in a press conference after the meeting of governors from the South and Southeast regions and Mato Grosso do Sul. The reform rapporteur participated in part of the meeting.

Last week, the chief executive of Rio had shown another position by endorsing Tarcísio’s criticisms of the Council. “We believe that it takes away the states’ autonomy. That was one of my concerns [com a reforma], and I was expecting the text to make a more technical speech. But, at first, we understand that this violates the federative pact”, he said during the Lide Business Forum last Thursday (29).

This Tuesday, the governor of Rio Grande do Sul, Eduardo Leite (PSDB), said that he prefers the centralized management model because it is “more efficient”, but he was open to discussing the clearing house format defended by São Paulo, in case this is necessary to unlock the renovation. He acknowledged, however, that “it will be more work” to manage the IBS in this design.

At the end of the meeting, Ribeiro pointed out that there are points discussed by the governors that are not a consensus between them. The rapporteur has been working on an intermediate proposal to try to attract the support of São Paulo, but he himself recognized that this solution goes against other states and municipalities that prefer the Council.

In an interview with Sheet, the governor of Piauí, Rafael Fonteles (PT), said that the model defended by Tarcísio could generate costs and encourage judicialization. “The collection has to be centralized in the Council, otherwise you dismantle the reform”, he stated.

This Tuesday, the rapporteur Aguinaldo Ribeiro did not want to anticipate what his decision would be in the midst of the impasse generated around the theme and added that it was necessary to listen to those involved. According to him, it will not be possible to present a new report on the tax reform this Wednesday (5).

In addition to the centralization or not of collection, some governors defend an adjustment in the governance of the Federative Council, to prevent the interests of regions with a greater number of states from prevailing over others.

Eduardo Leite suggests that the deliberation quorums in the collegiate follow the criteria already used in voting on ICMS agreements within the Confaz (Tax Policy Council). The rule provides that, for approval, it is necessary to gather votes from two thirds of the states (18 out of 27) and one third of the federation units in each of the five regions.

The governor of Rio Grande do Sul stated that this is a “mechanism for the defense of inter-regional loyalty”. The concern exists because the North and Northeast bring together 16 states, enough to form a majority. “It’s not suitable […]. There must also be a regional understanding to avoid any kind of preponderance of one region over the other”, he said.

The governor of Mato Grosso do Sul, Eduardo Riedel (PSDB), also defended changes on the Federative Council, in particular on the governance of the body. For him, population criteria should be taken into account for the weight of each state in decisions.

Despite the demands, he acknowledged that the proposals will not necessarily be incorporated. But he said he hopes that at least part of them will be taken into account by the rapporteur so that there is more “balance” in the decisions.

He pointed out that the Council will not have the power to determine what goes to each state or municipality, as this calculation will be automatic. “Nowadays, the basis of the reform is technological and a pre-defined system makes the distribution. The Council will only discuss interpretations, collections, regulations, divergences”, he affirmed.