Tax reform: Tarcísio criticizes the creation of a council – 06/26/2023 – Market

The governor of São Paulo, Tarcísio de Freitas (Republicans), defended this Monday (26) the need to revise the text of the tax reform, especially with regard to the creation of a federative council, with management shared by states, the Federal District and municipalities, which would centralize the collection of the new IBS (Tax on Goods and Services).

Questioned about the problems he sees in the reform proposal, the governor said that the most serious of them is “such a federative council”. “It is the withdrawal of autonomy from the states. The states cannot accept this”, he declared in Lisbon, where he is participating in a forum at the Faculty of Law of the University of Lisbon.

The governor of São Paulo evaluated that it is natural for the proposal to have points to be improved and that he will fight to change the creation of the council. “It is natural that this is the case, that from the moment the text is presented, we verify points that need to be improved. We will take our contributions and we will fight for these contributions to be accepted”, he said.

One of the pillars of tax reform is the merger and simplification of taxes. Under the current proposal, PIS and Cofins (federal taxes) would become the so-called CBS (Contribution on Goods and Services), the responsibility of the Federal Revenue Service. The IPI (also federal) would become a Selective Tax. And the IBS (Tax on Goods and Services) would be the merger of ICMS (state) with ISS (municipal). The collection of ICMS and ISS would be under the responsibility of this council.

The current text institutes the Federative Council, which will be “endowed with technical, administrative, budgetary and financial independence, with decisions taken from votes equally distributed between states and DF, and municipalities”.

Freitas also defended, at the event, the need for Brazil to undergo political reform, but stated that this would not be the time to dedicate himself to the topic. “The order of the day is tax reform,” he said.

The 11th Lisbon Legal Forum is held by the educational institution IDP, which has Minister Gilmar Mendes, of the STF (Federal Supreme Court) as a partner. The event, which has a partnership with entities such as FGV (Fundação Getulio Vargas) Knowledge, brings together Brazilian authorities such as governors, ministers, judges, and representatives of the Legislative Power, such as the president of the Chamber of Deputies, Arthur Lira (PP-AL ).