A group of 383 medicines will be exempt from tax, according to the first regulatory text of the tax reform on consumption, sent this Wednesday (24/4) to the National Congress. The text also provides for 850 medicines with lower taxes (reduced rate).
They are on this zero tax list (check below)for example, vaccines against dengue, flu, Covid-19, cholera, yellow fever, polio and measles, as well as medicines such as insulin and abacavir — an antiviral used to treat HIV.
The Ministry of Finance proposes that these medicines are not taxed at the rates of the Value Added Tax (dual VAT) — which brings together the Contribution on Goods and Services (CBS), a federal tax, and the Tax on Goods and Services (IBS), a subnational tax. .
To approve these Treasury suggestions, a set of rules must be observed. In the case of medicines, registration with the National Health Surveillance Agency (Anvisa) or production by compounding pharmacies is required.
The text that regulates the new Brazilian taxation model also proposes the exemption of equipment such as support bars for people with physical disabilities, wheelchairs, hearing aids and cochlear implants.
The extraordinary secretary for Tax Reform, Bernard Appy, stressed that there will be a “significant” reduction in the price of medicines.
“From the point of view of medicines, what is being done here is a very relevant reduction in the costs of Brazilian medicines, not only due to the expansion of the lists, but because today there is a lot of cumulative in the formation of products, which will cease to exist”, Appy pointed out.
Goods and services will have a 60% reduction in the general rate
In total, 14 goods and services will have a 60% reduction in the general rate. Education and health services are on the list, as well as medicines.
The average dual VAT rate has yet to be defined, but the average reference reaches 26.5%. In addition, the zero rate will be applied to 15 products in the basic basket.
Processing
The project begins to be processed by the Chamber of Deputies. It then goes to the Senate for analysis. As it is a complementary law, although it has a qualified quorum (absolute majority of both Houses, that is, 41 senators and 257 deputies), only one round of voting is required.
The president of the Chamber, Arthur Lira (PP-AL), committed last Wednesday (24/4) to putting the text to a vote in the plenary by July, before the mid-year legislative recess. In turn, the president of the Senate, Rodrigo Pacheco (PSD-MG), committed to voting on the text by the end of the year, “even though it is an election year”.
The Treasury’s forecast is that the regulations will take place between 2024 and 2025, with the changes coming into force from 2026.
