“We overcame the impossible”, says tax reform rapporteur in the Chamber

The rapporteur of the tax reform in the Chamber of Deputies, Aguinaldo Ribeiro (PP-PB), celebrated the approval of the PEC that simplifies taxes on consumption, provides funds for regional development and to finance ICMS credits until 2032, in addition to unifying legislation of the new taxes.

The voting score in the first round was 371 in favor against 121 against, with three abstentions. In the second round of voting, the score was 365 to 118. With approval, the text moves on to promulgation.

The approved text is a mix between the Chamber version and the Senate version, presented by senator Eduardo Braga (MDB-AM). After the agreement between the two legislative houses, the proposal will be enacted next Wednesday (20), in a joint session of the National Congress.

Aguinaldo Ribeiro stated that Congress did “the impossible” by approving a proposal that has been discussed for many years. “We overcame the impossible, because it was barrier upon barrier, those who preached discredit; but the courage and determination of many made this moment possible,” he said.

Ribeiro said that Congress is delivering a reform to Brazil that will bring progress. “Our tax system has been bankrupt for a long time, the burden is already very high. We are reducing the burden because we are going to increase the collection base and we are going to end cumulation. At this current moment, no one knows how much tax they are paying”, he declared.

According to the proposal, a complementary law will create the Tax on Goods and Services (IBS) – to encompass ICMS and ISS – and the Contribution on Goods and Services (CBS) to replace PIS, PIS-Importation, Cofins and Cofins-Import.

With federal resources, at current values ​​of R$730 billion over 14 years and budgeted outside the fiscal limits (Complementary Law 200/23), the PEC creates two funds: one to pay until 2032 for ICMS tax exemptions granted in the scope of the so-called fiscal war between states; and another to reduce regional inequalities.

The text also establishes other ways of compensating for revenue losses with the transition to the new format, one within the IBS collection mechanism and another specific to the distribution of the Tax on Industrialized Products (IPI), which will continue to apply only to products outside of the Manaus Free Trade Zone (ZFM) and that are produced within it as well. The objective is to maintain the competitiveness of this special area of ​​production.

The IPI compensation values ​​will also be outside the limits of the new primary expenditure regime.

With information from Agência Câmara de Notícias.