15/12/2023 – 22:12
By 365 votes in favor, 116 against and one abstention, the Chamber of Deputies approved, in the second round, the basic text of the tax reform on consumption. Parliamentarians voted on two highlights before concluding the session. The first maintained the original text, but the second removed weapons and ammunition from the selective tax, by 293 votes in favor and 193 against.
As the tax reform has not undergone changes of merit in relation to the text approved by the Senate, Congress will enact the constitutional amendment of the tax reform next week, deputy José Guimarães (PT-CE), leader of the Government in the Chamber, announced earlier. With the end of the vote, Congress concludes more than 30 years of discussions, after successive proposals that did not prosper in recent decades.
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“At this historic moment in which many of us are asking if this is happening, the Brazilian parliament has delivered a new tax system. This system we have has been broken for a long time. Load [tributária] It is very high in the country, but we are reducing it because we have increased the revenue base. Today, those who pay are those who have the least and need it most”, declared the reform rapporteur and majority leader in the Chamber, deputy Aguinaldo Ribeiro (PP-PB).
At around 5:30 pm, the Chamber had approved the basic text of the tax reform in first round. After around three hours of debate, deputies approved three highlights and rejected seven. The approved highlights maintained incentives for the automotive sector and battery manufacturers in the North, Northeast and Center-West and reinstituted the authorization for the salaries of state and municipal tax auditors to be equal to those of ministers of the Federal Supreme Court (STF).
The rejected highlights prevented changes to the rapporteur's text. Parliamentarians did not reinstate specific regimes for the sanitation and highway concession sectors. Earlier, the deputies maintained, by 326 votes to 161, the selective tax on weapons and ammunition, unless purchased by the Public Administration, but the issue ended up being reversed later. The selective tax will apply to products that are harmful to health and the environment.
Reporter
The rapporteur, deputy Aguinaldo Ribeiro (PP-PB), removed several points included by the Senate at the beginning of November. The extended basic food basket, which would have a tax rate reduced by 60%, and special regimes for sanitation and air transport, were dropped. On the other hand, deputy Aguinaldo Ribeiro (PP-PB), maintained the benefit for independent professionals, who will pay a 30% lower rate.
The aim of removing exceptions is to reduce the standard rate of future Value Added Tax (VAT). When the reform was approved for the first time in the Chamber, in July, the Ministry of Finance estimated that the VAT charged on most products would be between 24.45% and 27%.
With the exceptions included by the Senate, the rate would rise to 27.5%. This would make Brazil have the highest rate among countries that adopt the VAT-type tax. Currently, the country with the highest VAT is Hungary, with 27% tax.
Hybrid session
The second vote on the tax reform in the Chamber began shortly before 3 pm and is being held in a hybrid format, with some parliamentarians in the plenary and others voting online. The opposition tried to obstruct the vote throughout the day, but the president of the House, Arthur Lira, kept voting on the two rounds of the PEC this Friday.
As the Chamber only removed and reinstituted points from the PEC approved by the senators, without changing the merits, the proposal does not need to return to the Senate.
* Article updated at 10:38 pm to include information about voting for highlights.
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