Tax reform rapporteur proposes to create IBS with extinction of 5 taxes

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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.