The report of the tax reform presented this Tuesday, 4, in the mixed commission that analyzes the theme in Congress by deputy Aguinaldo Ribeiro (PP-PB) proposes the extinction of five taxes: PIS, Cofins, Tax on Industrialized Products (IPI), Tax on Circulation of Goods and Services (ICMS) and Services Tax (ISS). Instead, the proposal provides for the introduction of the Tax on Goods and Services (IBS), complemented by a selective tax.
The selective tax would replace the IPI, according to the rapporteur, “with a better defined incidence spectrum”. The category provides for taxation on goods whose consumption is to be discouraged, such as cigarettes and alcoholic beverages. The text includes the possibility that other products considered harmful to health or the environment may also be charged.
The union of taxes was already proposed by PEC 45, authored by deputy Baleia Rossi (MDB-SP). The report presented this Tuesday by Ribeiro joins the proposed amendments to the Constitution (PECs) coming from the Chamber of Deputies, the Senate (PEC 110) and the first part of the proposal prepared by the government and sent by the Minister of Economy, Paulo Guedes, the PL 3,887.
The rapporteur’s opinion provides for a transition of the two-phase tax system for a total of six years. The first would be the federal one, two years old, followed by the national one, another four years. The proposal reduces the total time of the change, which in PEC 45 was ten years.
From the third to the sixth year, the rates of ICMS and ISS would be gradually reduced, at the rate of 1/4 per year, until the extinction of taxes.
The rapporteur’s text unites three federal taxes, the IPI, PIS and Cofins, with a state tax, the ICMS, and a municipal tax, the ISS. It was already expected that the deputy would present a broad proposal instead of the fractional version that defended the Planalto, which proposed only the union of PIS and Cofins in the first instance.
“We adopted this format in order to combine efforts with the collaboration sent by the Executive Power, in the form of Bill No. 3,887, of 2020, which institutes the Social Contribution on Operations with Goods and Services (CBS), which will serve as an important subsidy for the elaboration of the complementary law of the IBS “, says the report. “There has been a lot of talk in the past few days about sliced reform. We are here proposing a structural reform. We offer the country a structured and phased reform, not sliced. Because we are incorporating the government’s contribution, which is CBS, as the first step of the federal IBS, which is precisely the PIS and Cofins “, said the rapporteur.
The proposal of the federal government, which has won support from the president of the Chamber of Deputies, Arhur Lira, in the last few days, is the slicing of the reform, with the creation of the Contribution on Goods and Services in the first stage. The project was sent by the Minister of Economy, Paulo Guedes as Bill of Law in PL 3,887.
During the reading of the report, Ribeiro defended the wide-ranging reform and criticized the splitting of the changes. “Those who think that fractional patches are capable of raising a failed model are mistaken, at the risk of discovering that in tax matters, wide doors always lead to short paths,” he said.
Future of the commission
In the late afternoon of Tuesday, while Ribeiro was still reading the report, the vice-president of the Chamber, Marcelo Ramos (PL-AM), stated that the President of the House had confirmed that the commission would be extinguished, since he exceeded the term of sessions of the Internal Regulations of the House.
Presidenthas just confirmed to me that, considering that the Tax Reform Commission has exceeded the session period, due to the House’s Internal Regulations, the commission is extinct.
– Marcelo Ramos (@marceloramosam)
After reading, however, the chairman of the mixed committee, Senator Roberto Rocha (PSDB-MA), reiterated the work schedule that states that the deputies and senators who are members must send suggestions to the text until this Friday and the rapporteur will present the final opinion next Tuesday, 11.
Senate President Rodrigo Pacheco released a note also defending the continuity of the commission, read by Rocha during the session. “The mixed commission did a long-term work on deepening the tax reform. It is reasonable and smart to give the opportunity to complete the work, which is effective with the presentation of the opinion by Deputy Aguinaldo Ribeiro “, he says.