Author: Amery Moisés Nadir Júnior *

Source: A Notícias - Joinville / SC - 05/05/2010

The progressive or "forward" tax substitution is an efficient mechanism for collecting the Tax on Circulation of Goods and Services, the ICMS, which attributed to the sending establishment the responsibility for the advance payment of the tax related to subsequent transactions up to the final consumer, using to do so, from an assumed calculation basis.

In other words, through the tax substitution system, the ICMS is now collected at the source and in a single payment. As an example, we can mention the case of the industry that sells a certain product, collects the ICMS due in the operation itself and also the tax (ICMS-ST) that would be due by the distributor and the retailer.

With regard to its legality, the tax substitution institute is supported by the Constitution (§ 7 of art. 150) and complementary law No. 87/96 (art. 6), the ICMS Law, characterized as a taxation that aims to simplify and rationalize taxation, curb tax evasion and combat unfair competition in the business environment, without, however, resulting in any kind of increase in the tax burden. In addition, in the event that the presumed taxable event - which served as the basis for the tax substitution - does not occur, the State must return the collected ICMS-ST.

In December 2009, Santa Catarina, following the example of the most economically developed Federation units, signed 14 new tax substitution protocols with the States of Minas Gerais, Rio de Janeiro and Paraná, which came into effect as of May 1 2010. The tax substitution regime will be implemented in both domestic and interstate operations and will cover operations with food, household artifacts, musical instruments, building materials, cleaning material, electrical material, toys, electronics, tools, household items. stationery and bicycles.

In addition to those mentioned, Santa Catarina has already instituted the tax substitution regime for other product segments, such as fuels, automobiles, motorcycles, auto parts, bedding, cosmetics, medicines, cement, paints, lamps, cigarettes, tires, beer, soft drinks and ice cream. .

The states that implemented the same set of tax substitution protocols in 2009 obtained rates of increase in ICMS collection between 23% and 120% in the segments covered. This does not burden the taxpayer or the final consumer with the increase in the tax burden, only using this powerful tool to inhibit tax evasion and its deleterious effects on the economy and commercial competition.

Therefore, the tax substitution regime only imposes a burden on those taxpayers who evade the ICMS and do not issue the invoice. In Santa Catarina, there will be no difference and, certainly, the system of tax substitution will contribute to the increase in state revenue and for our society to achieve the long-awaited tax justice and the promotion of the common good!

* Tax substitution manager at the State Finance Department