Tortoises in Carf’s text may limit revenue gains – 07/12/2023 – Market

The Chamber of Deputies included several “tortoises” in the Carf (Administrative Council of Treasury Resources) bill that could limit the gains predicted by the Union with the return of the so-called casting vote and with the new modalities of agreement involving taxpayer debts.

In political jargon, a jabuti is the passage inserted to deal with matters that are foreign to the initial objective of the proposal. In the day-to-day of the Legislature, the term is usually used to describe devices created at the last minute in spite of the wishes of the government on duty.

The maneuvers inserted in the text include the possibility of unlimited use of tax loss credits to settle debts with the Union —which would allow debtors to clear their names without disbursing a single penny— and the prohibition of the collection of fines in excess of 100% of the debt in case of evasion, fraud or collusion (today, the application is 150%).

One of the articles also provides that the PGFN (Attorney General of the National Treasury) provide for the cancellation of registrations in overdue debt that have had a fine greater than 100% applied. In the understanding of the body, there will be a great risk of judicialization if the device is kept in the Federal Senate.

There is also permission for taxpayers defeated in CARF by the casting vote between January and June 1 (period in which the tiebreaker rule came into effect under provisional measure 1,160) to ask for the annulment of the judgment. The measure could result in the cancellation of R$ 16 billion in debt registrations carried out in the period.

The government is still mapping the possible losses with the changes inserted by the rapporteur, deputy Beto Pereira (PSDB-MS), and intends to seek modifications in the negotiations with the senators.

The permanence of the “jabutis” could undermine the collection expected by the Ministry of Finance with the project that changes the rules of operation of Carf, seen as essential by the economic team to help close the accounts of the 2024 Budget and fulfill the promise of zeroing the deficit next year.

The resumption of the casting vote, which grants the Treasury the tie-breaking power in judgments of tax disputes in CARF, makes a favorable contribution. At the beginning of the year, the portfolio led by Minister Fernando Haddad estimated the permanent gain at R$ 15 billion, although the details of the conditions have since changed.

Not all the innovations in the text were negative for revenue. The rapporteur accepted a request from the PGFN itself to include in his opinion an article that could boost federal revenue by an additional R$ 34 billion.

The device improves the tax transaction, as the negotiation between taxpayers and the Union to settle outstanding debts is called, in search of improvements in the conditions of agreement for cases that are the subject of judicial dispute.

Today, these transactions can only have a discount equivalent to 50% of the credit value and payment in up to 84 months. The text extends the rebate to 65%, and the number of installments, to 120 months — which may reach 70% and 145 months, respectively, in the case of micro or small companies.

The new text also says that the companies’ gain with the discounts will not be subject to PIS/Cofins, IRPJ and CSLL, a benefit already granted in other types of transaction.

“It was these three changes that we made to unlock [a transação do contencioso judicial]”, says to Sheet the Attorney General of the National Treasury, Anelize Lenzi Ruas de Almeida.

“Instead of us fighting about it for another five years in the Judiciary, let’s resolve this process, close the judicial process, put money in the box, give a discount”, he says.

According to her, the negotiation is advantageous for the companies, not only because of the discounts involved, but also because the end of the dispute releases assets pledged today as financial guarantee in these processes. Unlocking these guarantees improves the conditions for obtaining credit for these companies.

Another favorable point is that, to adhere to the negotiation, the taxpayer will no longer need to give up the legal thesis definitively, only the ongoing process. “The taxpayer had to give up the thesis back and forth. It’s very risky, you don’t know what the Supreme Court will decide tomorrow. When you say you have to give up that process [apenas]it’s much easier,” he says.

According to Almeida, the improvement of the transaction was already being discussed by the PGFN, but ended up entering the bulge of changes in Carf as a way to expand the revenue potential for the Union.

The estimate of BRL 34 billion in extra revenue already includes the possibility for taxpayers to negotiate debts involving the judgment in the STJ (Superior Court of Justice) on the collection of federal taxes on ICMS benefits.

The Treasury has been talking about a potential of BRL 70 billion in revenue per year just with this judgment. The collection on liabilities, however, may vary depending on the adherence of taxpayers to the conditions offered.

Other disputes may be resolved through the transaction. According to Almeida, the special and extraordinary installments made since 2000 have generated an enormous amount of litigation, in the face of exclusions of taxpayers for non-payment or installments lower than the minimum amount.

The PGFN does not have a precise calculation of the amounts involved, but it has identified that the theses of the Judiciary in these cases favor taxpayers. In this case, it is not a question of freeing them from the charge, but allowing them to return to the renegotiation programs through the benefits. The objective of the PGFN is to issue a transaction notice to resolve these processes.

The attorney general, however, denies that it is a “Refis do Refis”. For her, the agreements seek to comply with court decisions and, at the same time, facilitate the entry of these resources into the Union’s cash.