Taxation of large fortunes is not on the agenda, says Appy – 11/03/2023 – Market

The extraordinary secretary for Tax Reform at the Ministry of Finance, Bernard Appy, stated this Friday (3) that the change in Income Tax should be sent to Congress at the beginning of 2024, arguing that he sees no point in sending a bill to the Legislative at the end of the year.

In an interview with the website Poder360, Appy said that an initiative to tax large fortunes is not being discussed. According to him, the income tax system is more important for revenue than charges on assets.

“The taxation of large fortunes is not on our agenda, not at the moment, we are focusing more on income taxation”, he said.

“Here in Brazil we have flaws that mean that high-income people often pay less tax than people with lower incomes, we are focusing on correcting these distortions, the tax on large fortunes is not under discussion”, he added .

The secretary said that there is no closed proposal for the reform of Income Tax, but the text will be based on an increase in efficiency and tax justice, charging less to the poorest.

In the interview, Appy also stated that changes to the text of the tax reform on consumption made by the Senate could take the general rate of the new tax to up to 27.5%, but the government does not rule out the possibility of the level being below 27%. .

According to him, the exact level of the rate —to be defined later via complementary law— will depend on the regulation of favored regimes, the scope of the selective tax and the exact definition of the items that will benefit from reduced charges.

The reform report is under discussion in the Senate Constitution and Justice Committee, where it must be voted on before being sent to the plenary.

Appy also said that the meeting at the Treasury decided that the annual value of 60 billion reais will be maintained for transfer to the Regional Development Fund provided for in the reform proposal — governors defend a higher value to compensate for possible losses with the changes.

The secretary stated that the government is comfortable with the fiscal effect of the proposal, considering this amount to be passed on to the States, and argued that there is a limit to spending.

“You can’t think that the government accepts any value, that’s not true,” he said.