Confaz Agreement will lead States to retain part of tax benefits

By ETCO
28/04/2016

States evaluate whether to retain at least 10% of the tax incentives granted to companies. Convention No. 31, of the National Council for Farm Policy (Confaz), authorizes them to adopt the measure so that the percentage is allocated to funds related to “development and fiscal balance of the States”. So far, at least four state governments say they intend to adhere to the practice: Rio de Janeiro, Rio Grande do Sul, Alagoas and Santa Catarina. In Santa Catarina, the retention is estimated to contribute to an increase of R $ 150 million in the State's annual revenue. According to the Finance Secretary, Antônio Gavazzoni, however, the agreement will only be useful if all States apply the measure at the same time. "If a state is left out, it will invalidate the agreement because the reduction would mean competition between states and a new fiscal war would come," he says.

Source: Valor Econômico (20/04).

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