Working group presents preliminary tax reform report

The deputies of the Working Group on tax reform in the Chamber of Deputies approved this Tuesday (6) the preliminary report for the Proposed Amendment to the Constitution (PEC) that will implement changes in the national tax system. Federal deputy Aguinaldo Ribeiro (PP-PB), rapporteur for the tax reform, presented a kind of preview of the substitute for PECs 45 and 110, both from 2019.

According to the rapporteur, the mayor, Arthur Lira (PP-AL), said that the substitute should be analyzed by the plenary of the House in the first week of July. The taxes that must be extinguished are: IPI, PIS/Cofins, ICMS and ISS. Some of the taxes that will be created: Tax on Service Goods (IBS) nationwide, Selective Tax (IS). The transition period for the distribution of the collection among the federative entities must be 40 years.

In addition, the text provides for dual Value Added Tax (VAT); IBS charge at destination; incentives for the Manaus Free Trade Zone. “One of the central elements in structuring the IBS to be created is the definition of its management model. In this sense, the two alternatives under discussion are the single national regime (shared by all federated entities) or the dual regime, in which the Union separately collects its share of taxation and the States and Municipalities, theirs”, emphasized the group. of work.

“In this context, the guideline is to adopt a dual version of taxes on consumption: one under the jurisdiction of the Union and the other shared between states and municipalities”, he added. The WG determined as a “measure to mitigate the regressivity of the
taxes on consumption” the return of part of the tax to low-income families via cashback.

“The Working Group recommends that a cashback system be envisaged, subsequently defining the eligible public to be benefited, as an instrument for the implementation of progressivity in consumption taxation”, says the report.

The report also defends “the maintenance of two favored tax regimes currently established in our Constitution: the Free Zone of Manaus and the Simples Nacional”. The group also defended the “construction of a Regional Development Fund with adequate financing and distribution criteria”.