Tax Reform: Tourism wants changes in the Senate – 07/11/2023 – Market

Associations linked to tourism are preparing to propose changes to the Senate in the section of the Tax Reform approved in the Chamber that deals with the sector. The complaint is that the changes made to the last minute text last week, after articulation of these entities, do not serve the tourism market as a whole, just a part.

The sector mobilized from Wednesday to Friday last week in the Chamber to propose a differentiated regime for the tourism and leisure sector, which was accepted by the rapporteur of the PEC (Proposed Amendment to the Constitution) of the reform, deputy Aguinaldo Ribeiro (PP -PB).

A part of the sector was contemplated by the changes: hotel services, amusement and theme parks, bars and restaurants, in addition to regional aviation. Airlines that operate non-regional scale flights, travel agencies, event and private transport companies, for example, were left out.

The president of Braztoa (Brazilian Association of Tourism Operators), Fabiano Camargo, said that he is mobilizing with other entities to study the impacts for the sector.

During the parliamentary recess, they intend to gather data, which will be presented to senators in the first weeks of August. Brazilian tourism seeks to be encompassed as a whole in a regime with a lower rate.

Camargo recognized the efforts of deputies to help the sector, but said that, if the reform does not encompass the entire tourism market, the chain will be affected as a whole, which will impact prices for the final consumer, including the segments benefited by the reform. .

Currently, the tourism sector pays 3.65% of federal taxes related to PIS and Cofins, and 2% to 5% of the municipal tax ISS, which varies according to the city. With the standard reform rate estimated at around 25%, in some cases companies in the sector could see their tax burden quadruple. “This is out of reality,” said Camargo.

He claims that tourism agencies, for example, have almost no inputs to receive tax credits, as provided for in the reform. “That is, we would have an increase in the load practically real and integral.”

One of the tourism agencies that said it would be affected if the reform remains as it is is CVC, which has already been facing challenges, many still linked to the effects of the Covid-19 pandemic. A Sheetthe new president of the company, Fabio Godinho, stated that the articulation made by the sector last week did not bring satisfactory results for everyone.

“Let’s understand now what happened. I emphasize that we are in favor of Tax Reform, as long as it simplifies our lives and does not make our activity unfeasible”, he said. Godinho argued that some sectors that have demands similar to those of tourism managed to be contemplated by the reform in a “more aligned” way.

“There is the civil construction sector, for example. Builders and intermediaries entered the reform as an exception. Imagine if construction companies and real estate agents entered? The real estate segment would break, and this is what is happening here with tourism, which is a correlated industry”, he stated.

AIR SECTOR

Representatives of the airline industry say that there is no clarity in the reform about which companies can benefit from being framed in regionalized aviation. Sought after, Gol and Latam did not take a position, saying that they are aligned with the position of Abear (Brazilian Association of Area Companies), of which they are associated.

Azul, which is not an Abear member, said it will not comment.

To the SheetAbear only informed that the association’s team is working to prepare for the next stage of the reform discussions.

In a statement that is on its official website, the entity states that the airline sector cannot receive differentiated treatment in relation to other modes of transport, which benefit from specific taxation regimes.

“In a country that wants to democratize aviation, the airline sector cannot receive tax treatment different from other modes,” he declared. Abear added that, if this differentiation remains, there is a risk of reducing the supply of flights, with impacts on job creation and the number of people flying.

“If that happens, our estimate is of an increase in the current load, bringing an unsustainable burden for companies that are resiliently overcoming the biggest world crisis ever seen in aviation, and for consumers, who want to fly more.”

UNITED SECTOR

Even the segments that benefited from a lower tax rate in the Tax Reform say they are united around the tourism sector’s claim.

In a joint response to the report, Sindepat (Integrated System of Parks and Tourist Attractions) and Adibra (Brazilian Association of Parks and Attractions) recognized that there had been an important advance for the sector in the Chamber, but said they were counting on the Senate “to expand this differentiated regime for the other activities of the tourism chain”.

“Since the beginning of the talks about the reform, the movements were made collectively. We are all going to work so that the entire tourism chain is included in the special regime”, they said.

The entities highlighted that tourism is a chain with several links, interdependent with each other, and the tourist depends on the provision of services by several actors.

“That’s why we need this issue to be reviewed in the next steps”, they highlighted.