From the newsroom with Reutersi From the newsroom with Reuters https://istoedinheiro.com.br/autor/da-redacao-com-reuters/
04/25/2024 – 11:42
The Ministry of Finance estimated this Thursday that the average rate of 26.5% provided for in the tax reform regulations will be divided between average rates of 8.8% for the Contribution on Goods and Services (CBS, federal tax) and 17. 7% for Goods and Services Tax (IBS, state tax).
+ Cashback, basic food basket, professions with less tax: what changes with regulation
The Ministry stated in a document that the tax reform regulations provide for “cashback” of 100% of CBS for gas cylinders, and 50% for energy, water, sewage and piped gas for low-income families. The ministry also said that the average tax burden on foods favored by the basic food basket will fall from 11.6% to 4.8%.
Full regulation of the tax reform should take place between 2024 and 2025, depending on the approval of deputies and senators. The transition to the new model is scheduled to begin in 2026. According to the government, the objective is to maintain the current tax burden during the transition process.
The project sent by the government to Congress contains a list of 15 items that will have a zero rate, such as rice, beans, coffee, soybean oil, butter and bread. There is also a second category with 14 foods that will be entitled to a 60% reduction on the standard rate, including cheeses and meats, with the exception of products considered luxury, such as fish eggs, cod and lobster.
The ministry also said that the differentiated regime for fuels provides for the maintenance of the tax burden and a competitive differential for biofuels and green hydrogen.
After decades of discussion, the reform that simplifies consumption taxation was approved by Congress at the end of 2023. Its implementation, after a transition period, still depends on the analysis of complementary laws that regulate specific points of the constitutional amendment.
In its central axis, the reform replaces PIS and Cofins (federal taxes) with the Contribution on Goods and Services (CBS), and combines ICMS (state) and ISS (municipal) into the Tax on Goods and Services (IBS). The Selective Tax was also created to replace the Tax on Industrialized Products (IPI).
On Wednesday, the Minister of Finance, Fernando Haddad, took to Congress the first bill regulating the reform, with the main definitions of new taxes, transition rules, differentiated regimes and specification of products and services that are exempt or with reduced rates.
A second text to be sent in the coming weeks will deal with topics related to rules for states and municipalities.
