Author: S. Barreto Motta

Source: Monitor Mercantil - RJ - 31/08/2009

Last week, when he installed new members of the Economic and Social Development Council, President Lula admitted clearly: he will no longer try to impose tax reform. In fact, it was never really part of his plans. Without a crystal ball, this column announced, on July 11 of last year: “Tax Reform for the English to see”. And more: "Nothing prevents the tax reform project from being just a scapegoat, something to take time out of Congress, while the Executive acts with provisional measures and decrees".

The column quoted Congressman Zenaldo Coutinho (PSDB-PA): “All the gestures of the government are in the opposite hand to that of reform. The tax burden increases, the collection is record and they want to create the CSS ”. Now, the picture has changed: with falling revenue, the result would be even worse. States and municipalities would want to create taxes or increase rates and the Union, with less resources, would insist on inventing contributions, such as CSS - which it does not have to share with other federal entities.

The National Confederation of Industry (CNI) adopts a dubious line: it claims to be in favor of reform, even though it knows that, in times of crisis, a monster can emerge, worse than it is now. Fecomércio-SP recalls that the tax burden already reaches 39% - and from there it could only go up. “Why is there no tax reform? Because it involves divergent and conflicting interests ”, says Adriano Biava, professor at the Faculty of Economics and Administration at the University of São Paulo. The public finance specialist points out the Tax on Circulation of Goods and Services (ICMS) as one of the main villains of tax injustices.

Amir Kahir, a consultant in the area of ​​public finance, asserts: "All these reforms have a profound effect on the ICMS, which is the main tax of state governments, corresponding to 83% of their revenue". Odair Zorzin, director of Moore Stephans do Brasil, says clearly: "The Union receives 60% of the taxes collected and, if it has to share with states and municipalities, it will have to increase the rates". As can be seen, it is almost impossible to carry out a fair tax reform, especially at the end of the government and close to elections. Lula did well to throw in the towel.