Senate changes increase the Tax Reform rate by 0.5 points, says Haddad – 11/02/2023 – Market

Senate changes increase the Tax Reform rate by 0.5 points, says Haddad – 11/02/2023 – Market
Senate changes increase the Tax Reform rate by 0.5 points, says Haddad – 11/02/2023 – Market

Minister Fernando Haddad (Finance) stated this Thursday (2) that he estimates an increase of 0.5 percentage points in the standard rate of VAT (Value Added Tax) in the Tax Reform project being processed in the Federal Senate in relation to the text approved in the Chamber of Deputies.

Despite the effect caused by the expansion of the Reform’s exceptions, the economic team’s assessment is that the final balance of the text is positive. For Haddad, the opinion under discussion is not perfect, but it represents a leap in quality compared to the current tax model.

“In relation to the version that came out of the Chamber, it increases by around 0.5 points [percentual]”, said the minister after meeting with the rapporteur of the proposal in the Senate, Eduardo Braga (MDB-AM), at the headquarters of the Ministry of Finance.

“It doesn’t reach 28%. If you take the study that [secretário extraordinário da Reforma Tributária, Bernard] Appy did, as he didn’t reduce the exception, he expanded it a little, he expanded [a alíquota em] about 0.5 points. We gave the estimate to the Senate’s technical team, this has to be made public”, he added.

The economic team’s calculations for the initial Tax Reform project indicated a total charge between 25.45% and 27% on consumption. With an increase of 0.5 percentage points, the rate could reach 27.5%.

“In relation to the current rate, it falls for the vast majority of sectors”, he pondered. Haddad also said again that “the fewer exceptions, the better for the country.”

In the Senate’s opinion, Braga included specific regimes for sectors such as tourism, travel agencies, sanitation and highway concessionaires, in addition to increasing the federal government’s annual contribution to the FNDR (National Fund for Regional Development) to R$60 billion.

“Is it perfect? ​​Nothing is perfect. But in light of what we have, the leap in quality that we are going to make in relation to our current tax system, I think it is invaluable. We are going to be among the good tax systems in the world,” said Haddad .

According to the minister, the technical team evaluated during the meeting – which lasted more than three hours – point by point the text under discussion in the Senate.

“These are small details, sometimes drafting details to avoid legalization, sometimes proposals that he [Braga] received at the last minute and wants an impact assessment. We are very sure that the report is well done and that we will have a good majority in the Senate,” she said.

After the meeting with the economic team, the senator stated that no significant adjustments will be made to the text until next week.

“We will have small adjustments, some even editorial in relation to the text presented. But these are fine adjustments that are being made so that we have more legal certainty and, therefore, have the certainty that the text presented will represent simplification, transparency, federative balance , neutrality”, said Braga.

In an interview with Sheeton the eve of the meeting, the rapporteur said that the Tax Reform already has the necessary votes to be approved by the CCJ (Constitution and Justice Commission) and the Senate plenary.

A PEC (proposed amendment to the Constitution) requires a simple majority in the CCJ and the support of at least 49 of the 81 senators to be approved in the House plenary, where it goes through two rounds of voting. Braga did not reveal the vote count, while Haddad said he wanted to exceed 60 votes.

The expectation is that the PEC (proposed amendment to the Constitution) will be considered next Tuesday (7) at the CCJ (Constitution and Justice Commission), deliberated in the Senate plenary in the first round on Wednesday (8) and, on Thursday (9 ), in the second round.

The head of the Treasury also avoided commenting on the discussion about the revision of the fiscal target for 2024 and asked that his desire to talk only about the Tax Reform be respected. “When I have news for you [jornalistas]I give”, he stated.

The article is in Portuguese

Tags: Senate increase Tax Reform rate points Haddad Market



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