More than 20 entities request ‘total rejection’ of PL on changes in the IR

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More than 20 entities from different sectors of the economy launched a manifesto requesting “total rejection” of changes in the Income tax (IR) proposed by PL 2,337/21. The text would increase the tax burden and the complexity of the Brazilian tax system, according to the document signed by institutions such as the Brazilian Bar Association (OAB), National Confederation of Services (CSN) and the trade associations of São Paulo, Minas Gerais and Rio de Janeiro.

The entities classify the return of the taxation of dividends as a setback, arguing that the measure was rightly extinguished 25 years ago, “with recognized results in terms of collection”. In addition, they consider that the changes would undermine legal certainty, both for businesses already installed in the country, and for new investments in the current context of the sanitary crisis.

“For decades, companies organized themselves financially and societally on the assumption that these would be the applicable rules. Changing them, in addition to producing diametrically opposite effects to those pointed out, results in an unacceptable increase in the tax burden for important sectors of the national economy”, he says the manifest.

The manifesto argues that this increase in taxes on “relevant sectors of the economy” could pressure prices, causing the “dangerous prospect of a return to inflation”. The entities also criticize what they call “unjustified elimination of the deductibility of remunerative interest on equity”. The induction of withholding dividends is another point mentioned, since it would delay the payment of taxes, generating unpredictability in collection, contingent on the consumption of shareholders and discourage investments in other companies.

“For these reasons, we appeal to the distinguished Members of the National Congress to proceed with the shelving of the project, especially on this occasion when everyone’s attention is required to face the health crisis and its economic and social consequences, not to mention the restrictions to a broad debate with Brazilian society”, they conclude.

The manifesto is also signed by the São Paulo Lawyers Association (AASP), Brazilian Association of Tax Advocacy (Abat), Brazilian Association of Financial Law (ABDF), Brazilian Association of Communication Agencies (Abracom), Brazilian Association of Energy Distributors Elétrica (Abradee), Brazilian Association of Tax Law (ABRADT), National Association of Energy Consumers (Anace), British Chamber of Commerce and Industry in Brazil (Britcham), Center for the Study of Law Firms (CESA) and Brazilian Institute of Competitive Ethics (ETCO).

The Federation of Commercial Associations of the State of São Paulo (Facesp), as well as the Federation of Services of the State of São Paulo (Fesesp) are also part of the group. The Brazilian Lawyers Institute (IAB Nacional) and the São Lawyers Institute (IASP), the Advocacy Defense Movement (MDA) and the Pharmaceutical Products Industry Union (Sindusfarma) also sign.

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