BRASÍLIA – After focusing on the large “tax tortoises”, the IRS will now comb through the more than 200 tax benefits that exist in the country. Most of them are considered “invisible” because they have less substantial values — in the millions rather than billions — and because the government has little information and control over them.
The proposal, which appears in a Bill sent to the Congress, is that companies are required to complete an electronic declaration listing all the incentives they have. From there, the Tax Authorities will identify companies in an irregular situation, that is, those that enjoy the benefits without being entitled, and will then exclude them.
“Many of these benefits are approved by Congress without any type of possibility of control, because they are for self-enjoyment (no prerequisites). The taxpayer receives the benefit and simply stops paying the tax”, says the Federal Revenue Secretary, Robinson Barreirinhas. “This takes away governance from public authorities in relation to these hundreds of regimes,” he says.
According to the secretary, the form will be easy to fill out, without the need to send documentation. “The IRS will pull the documents from the system and check whether the company meets the requirements for those benefits. It will then inform you whether or not she is entitled”, he says.
A company that has been condemned under the Improbity Law, for example, will not be able to make use of these benefits. Other impediments may be related to the Anti-Corruption Law or environmental legislation. If you are taking advantage of the benefit improperly, the taxpayer will be subject to punishment, in addition to exclusion from the differentiated regime.
Currently, says Barreirinhas, the government is unable to see who is benefiting from these incentives, with what values and whether the public policy objectives are, in fact, being achieved. “With this electronic control, which will be very simple, we will eventually provide instruments for the Ministries of Agriculture, Development and Industry to analyze the data and results of the policy”, he says.
The idea is that mapping also helps the government in the task of reducing these benefits — as determined by the Constitution itself. This is because, in 2021, Congress approved an amendment that establishes that, until 2029, the cost of these measures, in terms of tax waiver, is limited to 2% of GDP. Currently, the estimate is that they are equivalent to 4.5% of GDP.
“Who knows, when we classify and guide the taxpayer, showing that he has no right, we, without revoking any incentive, will be able to reduce this percentage (from 4.5%). It’s a smart way to see these benefits before cutting back,” says the secretary.
According to the Tax Authorities, tax benefits will be included in this analysis progressively. Incentives linked to Personal Income Tax, for example, will not be included in the short term, as they will be the target of a reform proposal that must be sent by the government to Congress by the end of March. Simples Nacional, which has a clearer dynamic of taxpayer entry and exit, will also not be analyzed.
The Emergency Program for the Resumption of the Events Sector (Perse), which, according to the Tax Authorities, has been used improperly, will be one of the most immediate focuses of this fine-tooth comb. “We will have broader control of Perse. It is worrying, it always has been and is our focus”, says Barreirinhas.
In addition to reviewing tax benefits, the Bill sent to Congress establishes new guidelines for compliance programs, to reward good tax payers, and creates a type of “dirty name” list for persistent debtors.
Among the rewards provided for good taxpayers are the progressive reduction in the payment of the Social Contribution on Net Profit (CSLL), of up to 3%, and the possibility of self-regulation within a period of 60 days. There is also a prohibition on the listing of assets and preference in bidding.
According to Barreirinhas, the idea that guides the project is that of a Federal Revenue that stops being “punitive” and becomes “guidance” for taxpayers. The next step will be to negotiate the text – which was sent with constitutional urgency, that is, with accelerated processing – with parliamentarians, who will resume legislative activities next week.