The poorest families or those enrolled in social programs will be able to receive back 50% of the Contribution on Goods and Services (CBS, federal tax) paid on electricity, water, sewage and piped gas bills. The proposal is included in the complementary tax reform regulation project, sent to Congress on Wednesday (24) night.
In relation to the Tax on Goods and Services (IBS), charged by states and municipalities, the refund will be 20% on the bills for these services. The reimbursement will also only benefit low-income families. In the case of gas cylinders, the refund will be 100% of CBS and 20% of IBS.
Called cashback (refund of taxes in cash), the mechanism was approved in the constitutional amendment of the tax reform to make Brazilian taxation more progressive, with the poorest paying proportionally less taxes in relation to the richest. Cashback allows tax benefits to be concentrated on the low-income population, without also being enjoyed by the richest.
Income bracket
The cashback regulation established that the refund of taxes will benefit families with a per capita income of up to half the minimum wage and those registered in the Federal Government’s Single Registry for Social Programs (CadÚnico). Anyone in one of these two categories will automatically be included in the program.
The complementary bill also provides for the possibility that the cashback be extended to other products, with a refund of at least 20% of CBS and 20% of IBS. The project, however, did not detail which items the mechanism could affect. The reimbursement percentages may be high, depending on ordinary law.
In the case of piped gas, water and sewage, the refund of taxes will be automatic, through discounts on bills. For other products, it will be up to the Federal Revenue Service to coordinate the reimbursement, which must be used within two years after purchase.
Local programs
According to the text delivered to Congress, the federal government, states and municipalities will be able to create their own cashback. Some states, such as Rio Grande do Sul, have mechanisms for refunding the Tax on the Circulation of Goods and Services (ICMS) for food purchases for low-income populations.
The project, however, prohibits the mechanism from benefiting products that are harmful to health and the environment on which the Selective Tax will be levied. The government proposed that the surcharge would affect products such as cigarettes, alcoholic beverages, sugary drinks, polluting vehicles and vessels, oil, natural gas and iron ore.
Sanitation
During the tax reform process, last year, the Senate included the sanitation sector in the special regime, which would allow companies in the segment to pay less taxes. However, in the second vote in the Chamber of Deputies, the benefit fell, to avoid slicing the proposal and the need for a second vote in the Senate.
In recent months, sanitation companies have asked for the inclusion of water and sewage bills in the cashback. The companies argue that the return of taxes will increase access to running water and sewage for the lower-income population.
