Author: Rubens Branco

Source: Jornal do Brasil, 15/06/2009

In recent weeks, the discussion about the Tax Reform proposal that the government sent to Congress since last year and which apparently wants to discuss and approve during 2009 has intensified in the press.

Discussions vary from the classification of the proposal as a true monster, or a true absurdity that will in no way contribute to improving the current situation, where we pay the highest taxes in the world, surrounded by a bureaucracy that dulls and makes production more expensive, to those who political or party reasons make the reform project as the best to detoxify production and make our tax system more just.

Obviously, each one defends based on what they know and unfortunately it is noted that those who defend the current proposal do not understand anything about taxes and what the country really needs and defend the proposal just to be well with the walk. up so that in the future they can win a position in some state-owned company or be appointed a technical advisor to the Congress with a good salary level without having any type of intellectual preparation for that, other than the good and perfect bag-puller.

I have already had the opportunity to speak about this proposal that is in Congress, which has very little to reform.

The only major proposal contained in the project is the unification of the ICMS in order to have in Brazil only one legislation of the highest tax that exists in Brazil (in terms of tax collection) without hampering companies as it happens today.

However, it is not enough just to unify the ICMS, but also to simplify it, given that, as it is today, this tax has the greatest possibility of corruption that exists in the history of the modern world, given the totally disproportionate penalties that this legislation provides, in all Brazilian states, for the simple error in issuing an invoice.

What else is proposed in the reform, such as the creation of a Federal VAT to replace some contributions, is nothing more than a blank check that the government places for society since it will be a tax that may be levied on the same calculation basis other taxes (the so-called tax on taxes) without saying what their actual rate will be.

The other amendments contained in the proposal or the vast majority of them can be made without the need to change the Federal Constitution (such as the elimination of the Social Contribution on Net Profit - CSSL), just for that purpose an ordinary Law.

Basically, the objective of this reform proposal is to once again deceive the people who cannot understand it by selling off the idea that this will make someone's life easier in the future.

What the Government should do is to appoint a group of experts on the subject and improve the text that has been prepared by handing over the product of this work to the new President from 2010.

In addition, tax reform takes place in an environment of economic growth and tax collection not in a year when the country is expected to be in the midst of an economic recession.

For this reason, I stand with those who think that this issue should be transferred to the next term, leaving the President-elect to negotiate with Congress a real Tax Reform and not what has been presented.

Rubens Branco, Lawyer.