03/07/2024 – 21:28
The seven deputies who make up the working group to regulate tax reform have finalized the first preliminary report after an eight-hour meeting with the Speaker of the Chamber of Deputies, Arthur Lira (PP-AL). The content will be released this Thursday, the 4th, with the expectation that there will be further modifications and adjustments.
This is because the report will not address the most controversial issues of the reform, such as the composition of the basic food basket with zero tax, with the possible inclusion of meat, nor changes to the Selective Tax, the so-called “sin tax” – which will be levied on items that are harmful to health and the environment. Several segments, such as the soft drink industry, are trying to avoid the extra taxation and are pressuring lawmakers for changes.
“Today, we managed to finalize the text. Logically, we are including everything that is a consensus among the deputies, but there are many things that do not depend only on us, nor on the president (of the Chamber, Arthur Lira); it depends on the benches, the leaders and presidents of the parties”, stated deputy Joaquim Passarinho (PL-PA), who is part of the working group responsible for regulating the backbone of the reform.
According to him, all issues that may influence the standard rate of the new Value Added Tax (VAT, which will unify five taxes) will be handled by the party benches. The discussion on the possible taxation of agribusiness investment funds (FIAGR) and real estate investment funds (FII) has not even been concluded.
“The parties will talk to Lira so that we can draft this text for next week,” said Passarinho, during a PL bench meeting attended by the State had access in the opening minutes.
The message was reinforced by Congressman Cláudio Cajado (PP-BA), another member of the group: “We had a long meeting with the Speaker of the House to adjust the text. Now, we will have a meeting with the benches, we will seek out each of their respective parties and talk to the leaders.”
Parliamentarians interviewed by the report state that the strategy is to divide the benefits and burdens of the most controversial changes, especially those that could increase the overall VAT charge.
The average rate of the new tax, according to the Treasury Department’s calculations, is 26.5%, but could reach 27.1% simply by including meat in the zero-tax basic food basket – a request defended by the supermarket sector and the ruralist caucus in Congress. Currently, these items are at a reduced rate, with a 60% discount on the charge.
On Wednesday afternoon, after a meeting with members of the working group, Lira said that the inclusion of meat is not a trivial matter, contradicting the statements of President Luiz Inácio Lula da Silva (PT), who defended the inclusion of proteins consumed by the poorest, such as chicken, for example.
“There is no controversy regarding meat. Protein has never been included in the basic food basket. If it is included, we will have to see how much this inclusion represents in the tax rate that everyone will pay,” said the Speaker of the Chamber of Deputies. He stated that the change would have a “heavy price for all Brazilians.” Lira has been advocating that the average VAT rate should be maintained and that any new benefits should be compensated.
Earlier, Congressman Hildo Rocha (MDB-MA), who is also a member of the working group, stated that the WG is evaluating the inclusion of weapons in the “sin tax” taxation. The charge was even foreseen in the Proposed Amendment to the Constitution (PEC) of the reform, but was removed from the text through a highlight presented by the PL during the vote in the plenary of the Chamber, in December of last year.
The “bullet caucus” and allies of former President Jair Bolsonaro are defenders of the arms agenda in Congress and are resisting this measure. This Wednesday, Congressman Passarinho – who is the PL representative in the reform working group – met with Bolsonaro to discuss the issue.
At the end of the meeting, Bolsonaro sent a message to allies recommending that the party not vote on anything that would increase the tax burden. The slogan was repeated by members of the PL in the Chamber of Deputies, but behind the scenes, some consider the request generic, since agribusiness, a sector identified with Bolsonaro’s support, is the one that works the hardest to include meat in the zero-basic basket.
The deputies have also been discussing the possibility of including online sports betting, known as bets, in the Selective Tax – including as a way to compensate for the expansion of the basic food basket. The members of the WG requested the Ministry of Finance to conduct a study on the revenue potential of the measure and the impact on the VAT rate, but they claim that the figures were not provided.
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