Tax reform will have council to manage taxes and fund of BRL 40 billion a year

The tax reform project that is being discussed again in the Chamber of Deputies this Thursday (6) should confirm the creation of a Federative Council to manage the collection and distribution of the new taxes that will be created and also the criteria for the Regional Development Fund that will be created. will compensate states for possible resource losses.

These new points began to be discussed on Wednesday (5) after intense meetings throughout the day and in the plenary session that ended around 11 pm.

The expectation is that the project will be approved this Thursday (6) in the first round and on Friday (7) in the second before being sent to the Senate. Reginaldo Lopes (PT-MG), who led the reform working group in Congress, says that the changes are mainly supported by the producing states.

“Who understood that it is fairer to change taxation to the destination [e não na origem]. It does not justify a taxpayer from Piauí paying tax to the state of São Paulo”, he said in an interview with GloboNews.

Lopes also stressed that the creation of the Federative Council, which will manage the collection and distribution of taxes collected will be “merely operational, at most normative” without the participation of the Union.

“It strengthens the federal pact, by giving parity in the participation of the municipalities. We are building a decision-making criterion of a qualified majority by two thirds, either by the council in its entirety and also looking at the qualified majority by the regions of the country”, he said in reference to a demand by the governor of São Paulo, Tarcísio de Freitas (Republicans), who defended criteria for state participation in the council.

The deputy explained that the day in the Chamber will be for discussions on the parameters for sharing the taxes collected, which will be centralized in the Union so that there is no “cumulative” of taxes, in addition to the edition of a complementary law to define how the resources of the Regional Development Fund to compensate states that may have revenue losses.

“We are still negotiating the value of this fund, so far R$ 40 billion adjusted annually for inflation as a mandatory government expense, which Minister Fernando Haddad released”, he added.

Project changes

According to the rapporteur, the project proposes the replacement of four federal taxes (PIS, Cofins, PIS-Import and Cofins-Import) by a Contribution on Goods and Services (CBS), managed by the Union; and two other taxes (ICMS and ISS) for a Tax on Goods and Services (IBS), managed by states and municipalities. The Tax on Industrialized Products (IPI) will become a selective tax.

The IBS collection will be centralized and organized by a Federative Council. Funds will also be created to compensate for the losses of federal entities and to encourage regional development and the fight against poverty.

Ribeiro also informed that he had included in the text a zero rate for the basic food basket, with the aim of presenting a solution to the arguments of those who claimed that the tax reform would “harm the poorest”. Other alterations brought about by the substitute concern the preservation of the Manaus Free Trade Zone and Simples Nacional.

He anticipated that he would change the rules on the Federative Council present in the proposal, to give more representation to some states, since this point is one of the main obstacles to the approval of the project.

Another point highlighted by Ribeiro deals with the preservation of the cooperative act, a claim, according to the rapporteur, of agribusiness, and “which still may not be the way we wanted, depending on the time”, but which will also be improved throughout the discussions of the tax reform.