Proposal was approved by 53 votes to 24, the same score as in the 1st round; the text now returns to the Chamber of Deputies
The Senate approved this Wednesday (November 8, 2023), in the 2nd round, the tax reform by 53 votes to 24. Only the Novo, PL (Liberal Party) and Republican benches voted against it. Now, the text returns for voting in the Chamber, also in two rounds, as it was modified by the senators.
The score was the same in the 1st round of voting for PEC (Proposed Amendment to the Constitution) 45 of 2019. The approvals represent a victory for the government of President Luiz Inácio Lula da Silva (PT), which has the proposal as a priority for the its management. The topic has been debated for more than 30 years in Congress.
Read how each party voted on tax reform:
Read how each senator voted on tax reform:
Before going to the plenary, the proposal was approved by 20 votes to 6 in the CCJ (Constitution and Justice Commission) on Tuesday (Nov 7), with a score within the government’s estimate.
After the vote in the Senate is completed, the text will return to the Chamber for analysis as it has been changed. There, too, two votes will be needed, with at least 308 of the 513 deputies in favor of the text. The opinion of Eduardo Braga (MDB-AM), rapporteur in the Senate, brought a series of changes in relation to the text approved in the Lower House on July 6.
Braga included the possibility of periodic review every 5 years of tax benefits that reduce taxation in specific sectors. This review will be carried out based on what is defined in future complementary law. Braga increased the value of the FDR (Regional Development Fund) from R$40 billion to R$60 billion. FDR’s change had the approval of the Ministry of Finance and was defended by the States. The excess R$20 billion will be distributed over 10 years from 2034.
Another change suggested by Braga was the reference lock, a ceiling on the tax burden of new taxes. The ceiling will be the average revenue in the period from 2012 to 2021, calculated as a proportion of GDP (Gross Domestic Product).
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