Source: Folha de S.Paulo, 14/08/2005

By FERNANDO CANZIAN

The Economic Policy secretary of the Ministry of Finance, Bernard Appy, says that one of the main concerns of the government regarding the tax reform project is that there is no average increase in the current ICMS rates.

"In the last discussion with leaders of the Chamber of Deputies, concern about the possible increase in the tax burden appeared, and it was agreed that the project would include a device so that the rates and their fixing do not lead to an increase," he says.

Appy says that, in addition to avoiding more taxes, the goal of the reform is to reduce tax evasion.

“The project will have this effect because it closes the space for one of the main mechanisms of ICMS tax evasion, which is accounting as an interstate operation of an internal operation. This is quite widespread and should end, as the interstate rates become the same. ”

For Gilberto Luiz do Amaral, president of the IBPT, as outlined, the reform will not solve the problems of overlapping taxes that currently exist in the tax structure.

Amaral states that, as the federal government has increasingly appropriated revenues from taxes not shared with the States (through new contributions and taxes), it is difficult for governors to give up the rates they practice today in view of the promise of being compensated for a compensation fund.

The businessman Paulo Francini, director of the Economy Department of Fiesp (Federation of Industries of the State of São Paulo), considers the term tax reform “too pompous” for what is being proposed.

Francini says that the changes, if they occur, should be gradual and test models so that they result, at most, in a “” neutrality ”from the point of view of a possible increase in the tax burden.

Emerson Kapaz, from Etco, says that the GVConsult study serves as a “simulator” that offers some predictability about the possible effects of changes that may be made in the reform. In his opinion, from these simulations, one can have a clearer idea of ​​how to create an efficient compensation fund for States.