Income Tax Reform: Rapporteur Evaluates Scaling Reduction of Corporate Tax

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Pressed by the governors, the rapporteur for the reform of the Income tax, deputy Celso Sabino (PSDB-PA), evaluates new changes in the proposal, considered the second stage of the tax reform.

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In a meeting this Thursday with state finance secretaries, he said he is evaluating the creation of triggers to reduce corporate income tax.

The purpose of the changes is to reduce resistance from the states, who fear they will lose revenue with the reform. Governors began to mobilize against the proposal.

At the meeting, Sabino said that he is studying to propose a smaller reduction in the IRPJ, if the tax collection is below inflation. In this scenario, the drop would be 7.5 percentage points (pp) in the IRPJ next year. The tax would drop from 25% to 17.5%.

In addition, there would be a reduction of 2.5 pp per year in 2023 and 2024, totaling a reduction of 12.5 pp. This scenario would only be achieved with a collection below inflation.

If the collection is greater than inflation, what is in the current text of the rapporteur is valid: a drop of 10 pp in 2022 and another 2.5 pp in 2023.