Tax reform: Tebet says that segments of the service sector will be able to discuss a differentiated rate

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Minister of Planning participated in breakfast with businessmen. She assessed that, along with the fiscal framework and the new ‘PAC’, tax reform should stimulate economic growth. Simone Tebet, Minister of Planning and Budget of the federal government Sandro Menezes The Minister of Planning and Budget, Simone Tebet, said this Monday (12) that the federal government intends to approve the tax reform on consumption in the National Congress by the end of this year. The statement was made during breakfast with members of the business segment of the Economic, Social and Sustainable Development Council (CDESS), in São Paulo (SP). According to the minister, there will be time for sectors that foresee an increase in their tax burden, such as services, to discuss the possibility of a differentiated (lower) rate in the Legislative. “They will have all the time, including in the Senate [no segundo semestre], some sectors, especially the service sector, to see the question of the rate, a little different in relation to this chain of some service sectors”, he declared. Last week, the tax reform rapporteur, deputy Aguinaldo Ribeiro (PP- PB), presented the general lines of the proposal contemplating the adoption of a dual VAT, a selective tax for products harmful to health, “cashback” for low-income families, in addition to differentiated rates for areas such as health and education. tax – which is also being evaluated by the Legislature – and the new public and private investment program, along the lines of the old Growth Acceleration Program (PAC), Tebet believes that the tax reform will boost the economy in the coming years. “That’s it. that generates jobs, that’s how we’re going to get us out of 2% growth, God willing, this year, I bet even a little more, not much more, to 3% GDP growth, like we want all of us, from 2025”, he said. Reform Congress prepares final report on tax reform proposal Discussed for decades and long awaited by the productive sector, tax reform is considered a priority by the government to bring Brazilian rules closer to the rest of the world and reform a system that is seen as chaotic by businessmen and investors . Despite being a priority, the reform is considered complex from a political point of view. Different governments have tried unsuccessfully to carry out tax reform in recent decades, focusing mainly on taxation on consumption. The proposals ran into resistance of a regional, partisan nature and from different productive sectors, all represented in the National Congress. Analysts estimate that the consumer tax reform has the potential to raise Brazil’s potential GDP by at least 10% in the coming decades. The main objective of the reform is to simplify and facilitate the collection of taxes. The measure is considered essential to unlock the economy and boost the country’s growth and job creation. However, sectors of the economy, such as services and agriculture, which represent around 70% of the Gross Domestic Product (GDP), claim that the tax reform on consumption will increase the burden of taxes on their activities. Luigi Nese, president of the National Confederation of Services (CNS), estimated that the proposals under discussion will at least double the sector’s tax burden, generating an immediate impact on prices, if passed on to the consumer, of 10%. Guilherme Mercês, Director of Economics at the National Confederation of Trade in Goods, Services and Tourism (CNC) cited a study by the entity according to which the proposals under discussion would generate an increase from 84% to more than 188% in taxation on the services sector. Coordinator of the Economic Nucleus of the National Confederation of Agriculture (CNA), Renato Conchon, informed that the entity supports the carrying out of a tax reform, but recalled that a good part of the sector’s production, intended for external sale, or products from the basic basket, pay taxes under current rules. Quality of public spending Faced with the limitation of public resources, Minister Tebet stated that it is necessary “to stretch this budget as much as possible in view of the dimensions of the problems we have”. And he assessed that this can only be done with fiscal balance, that is, with public accounts in order. “It is not possible to spend more than you collect. Spend exactly the size of revenue growth, 70% [do aumento da receita, como consta no arcabouço fiscal]. And a very clear goal of zeroing the primary deficit [das contas públicas], and from there generate surplus. From the fiscal point of view, we are very attentive”, she declared. Simone Tebet also said that sustained economic growth is not only achieved with public policies, but also with the quality of public spending.

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