Lecture by Hamilton Dias de Souza on Legal Security and Tax Reform
Hamilton Dias de Souza, a member of the ETCO Advisory Council, spoke about the principles he believes should guide tax reform and criticized the proposed project in the Chamber of Deputies (PEC No. 45).
He recalled that the country is faced with two possibilities: making a comprehensive reform, which he called “disruptive”, involving profound changes in the federal pact and in the Constitution; or make specific changes to correct the problems already identified in the current model. And he defended the second alternative. “I don't think that a tax reform should abolish concepts that are already established. Especially because these concepts often take 20 years, 30 years to settle, ”he said.
Citing divergences that still persist in the current system, such as the return of amounts charged excessively in the tax substitution regime, the collection of ISS on leasing operations and the creation of federal contributions by ordinary laws, warned of the risk that a radical reform introduce new points of legal uncertainty without solving the old ones. “When there is a disruptive tax reform, changing all concepts, we can all imagine what will happen. How long will it take for all these things to settle, and how businessmen, taxpayers, how we can all organize our lives, ”he said.
In relation to the proposal, inserted in PEC 45, of creating a national tax, the IBS (Goods and Services Tax), replacing federal, state and municipal taxes, Hamilton developed a long reasoning to express his understanding that the change violates a stony clause in the Constitution, which prevents “an amendment to abolish the federation”. “There is a jurisprudence in the Supreme Court that says: when you weaken, when the federation weakens, there is a tendency to abolish it. Therefore, "tending to" is "diminishing power", "weakening autonomy" ", he argued. In his assessment, by reducing the autonomy of states and municipalities to institute and freely change their taxes, IBS falls into this definition.
He also questioned the argument that the unification of taxes would bring the necessary tax simplification, remembering that it provides for a transition period of ten years with the overlap of the two systems. “We will have IBS coexistence with all other taxes replaced, with ICMS, with IPI, with PIS, Cofins, with Service Tax. Therefore, with compliance costs for the two [tax systems] and inspections for both taxes. I would say that the poor taxpayer will surely suffer a lot ”, he said.
Other changes foreseen in the proposal, according to Hamilton, may cause new points of legal uncertainty, such as the migration of taxation to the destination of products and services, the application of IPI to primary products and the creation of a new tax on “special consumption”. “And what will special consumption be? Whatever the legislator of the future wants. And this business starts with selective tax and then the selective tax starts to reach even reasonably essential products ”, he warned.
The tax attorney warned of the extraordinary increase that PEC 45 proposes for the taxation of the service sector, in comparison with what is currently practiced. "The maximum tax burden, which is 5%, the next day would become 25%, and we would have a 500% increase on services," he said.
Hamilton also dealt with issues that he considers problematic in the current system, such as the distortion of the use of funds collected through fees, the excess of freedom to impose taxes by provisional measure and the increase in taxes for acts of the Executive.
Then, he listed some principles that the tax reform should obey to improve the business environment and bring more legal security to the country: simplification, harmony of the rules of the administrative / tax process, transparency and neutrality.
At the end of his lecture, the event coordinator, Everardo Maciel, asked him if the IBS proposed in PEC 45 could be compared with Simples, in order to respect the constitutional principle of the federation. Hamilton showed the distinction between the two tributes. “Simples does not absolutely prevent the existence of a normal institution of taxes by the Union, states and municipalities - not least because it is optional”, he replied. And he reaffirmed his view on the unconstitutionality of IBS.
Following is the transcript of the lecture:Continue...
Lecture: Legal Security and Tax Reform
Speaker: Hamilton Dias de Souza
Curriculum (Jun./19): Bachelor of law, specialist in tax law and master in economic and financial law from the Faculty of Law of the University of São Paulo - USP. Member of the Board of the São Paulo Lawyers Institute, of the Brazilian Academy of Tax Law, of the Legal Council of the Federation of Industries of the State of São Paulo, of the Council for High Studies on Finance and Taxation and of the ETCO Advisory Council. Former president and current member of the International Academy of Law and Economics. Holder of Chair No. 34 of the Academia Paulista de Direito. He was a professor of tax law at USP. Founder and owner of Dias de Souza Advogados Associados.
Good afternoon, everyone. First of all, I would like to thank Vismona for inviting me under the coordination of Everardo. I, who belong to ETCO, have a great joy here to be present here to what is for me a house of friends.
But I had many considerations to make, especially here initially, because there is a dilemma that we will see ahead in terms of tax reform and legal certainty, which is what we have to do: do we have to do a comprehensive tax reform? Restricted? Constitutional or non-constitutional? And so on.
I, first of all, notice that the current tax system, the so-called tax system, has basically been completely deformed. Or by constitutional amendments - we now have 40% of the provisions of the Constitution conveyed by constitutional amendments, 80 of which in 198. On the other hand, we have a series of concepts that were distorted by jurisprudence.
I'm not going, I was going to dwell on that a little bit, but the truth is that these questions were very well asked here by those who preceded me.
With tax reforms the question is this: tax reforms, should they be disruptive? This expression has been used a lot by Everardo. Or should these reforms be punctual?
I already say that in my opinion tax reform, it should, as far as possible, be punctual. I do not believe that a tax reform should abolish concepts that are already established. Especially because these concepts often take, as we saw earlier, 20 years, 30 years to be settled. I am therefore in favor of a punctual reform. Keeping what is already established in the system.
And here I ask some questions that have been the subject of countless discussions, too much has been said about billing and others. I move on to the next slide so that you can see how many constitutional concepts have not been changed by the Supreme Court jurisprudence.
I bring you here, see what a curious thing, in terms of ICMS and tax substitution. The Supreme Federal Court in 2002 said that tax substitution is something definitive. Therefore, if the value of ICMS is calculated at the end of the consumer, this is definitive. If the State has calculated an excess amount, the taxpayer cannot claim any refund.
The same Supreme Court comes in 2017 and says otherwise. Tax substitution going forward, the state must calculate the correct amount, if the calculated is greater, it must return the excess. And what about legal security in terms of this tax substitution? How do companies correctly calculate the impact this will have on buyers?
Here comes another recent issue: ISS leasing. Which city is competent to tax the ISS? Is it the municipality where the service provider or service provider is located? The settled jurisprudence of the Superior Court of Justice said in all letters: it is the municipality of the service borrower. However, later, the same court comes, [that] in 2008, the court comes in 2013 and says: it is not the borrower's municipality, it is the provider's municipality.
In terms of contributions, especially social contributions, for social security, those not defined, those referred to in article 195, 4, of the Constitution, comes the Federal Supreme Court first and says: only by complementary law can these contributions be instituted, this in 92. The same court comes in 2003 and says: there is no need for a complementary law, it is enough that these contributions are instituted for a certain public purpose. Second case, rapporteur, Minister Ilmar Galvão, first case, Moreira Alves.
And now comes the Supreme Federal Court, after all this, in 2014, and submits the same theme to general repercussion. It is still open and, therefore, we, after 31 years of taxation, do not know whether these contributions require a complementary law or can be conveyed by mere ordinary law.
What do I mean by that? To get into my theme of tax reform and legal security. When there is disruptive tax reform, changing all concepts, we can all imagine what will happen. How long will it take for all these things to settle and how entrepreneurs, taxpayers, how we can all organize our lives.
I want to say here maybe something that is not contrary to Everardo, me, Humberto and so many who are discussing tax reform so much. I just want to say that I am very sympathetic to the idea of making a tax reform as much as possible at the infra-constitutional level.
I think that Everardo puts it impeccable, however, I have some difficulty on certain topics. On certain issues, I think that a tax reform must also be made at the constitutional level, as I will explain below.
When it comes to tax reform, I would like to mention here what has been done in recent years. I have analyzed all the 95 tax reforms so far. In some way, we all participated a little in these attempts at tax reform. These PECs, all of them referred to, all had one thing in common: to unite taxes on consumption under federal jurisdiction. All.
Therefore, when talking about a project today in the National Congress, it is the same thing. None of these passed and today we are back. And I will make an analysis of PEC 45 that is in the National Congress and that practically everyone here, certainly, already has some knowledge of it, to point out something fundamental. I think she has some serious defects.
First of all, it seems to me that it defies the federative pact by removing competences from states and municipalities. I also think, as I will demonstrate or try to demonstrate, that it is extremely complex. And finally, at this point, a mathematical demonstration, which implies, contrary to what is said, an increase in the tax burden.
The essence of the project I put here, requested and I have these transparencies here for the purpose of making it easier for everyone to see.
There is a unification of taxes, so IPI, ICMS, ISS, PIS and Cofins would fall within the competence of the Union. It is said that there is a competence of the states only to vary the rates of the states and municipalities, and I think that this competence is at least debatable.
There is a uniform rate for all goods and services, which means that this Goods and Services Tax (IBS), if states and municipalities vary rates, will have to do so for all products. There is no point in taking a product from the basic basket and saying: I will reduce the rate for the product in the basic basket or for a certain item, the same with respect to services. If by chance you want to reduce the rates it has to be for everything and if you want to increase it also has to be for everything. This greatly reduces the spectrum of competence of subnational entities.
Another aspect is that the law comes and says: a complementary law will take care of all this, this is not a Union tax, it is a tax that will actually be instituted and disciplined by a complementary law. This complementary law will create a management committee that will take care, among other aspects, of collection, inspection and other aspects of the tax. And even the administrative process will be regulated by complementary law.
I think that, in the federative question, article 60 and paragraph 4 of the Constitution says that it will not be the object of deliberation proposed amendment to abolish the federation. It is enough that it tends to abolish the federation. I make a warning here, what is “tending to”? Here I do not stay with doctrine, there is a jurisprudence in the Supreme that says: when you become weak, when the federation weakens, there is a tendency to abolish it. Therefore tending to is "diminished power", "weakened autonomy".
I am not saying that there is a plaster on the Constitution. I am not saying that skills cannot be changed. What I am saying is that the core of autonomy for subnational entities has to be maintained. They have to have the power to collect their own taxes, to do fiscal policy, in short, not to depend only on the proceeds of the collection of other people's taxes.
Some would say: but federation, like the German, for example. You do not have a need for private skills, it is enough that there is a distribution of the proceeds from the collection. And, therefore, the union could create the IBS, transfer the proceeds of the collection in part to states and municipalities and the federation will be maintained. But here comes another observation: there is no federation model valid for all countries. The Federal Supreme Court has already said this: the federation model is the one designed by the constituent legislator, by the Brazilian legislator. Therefore, when it comes to federation, we have to think about the Brazilian federation. And this was designed based on two pillars: private competences to institute tax and participation in the proceeds of the collection of other people's taxes.
Therefore, it is within this pillar that I want to examine the issue and demonstrate, it seems to me, that what happened, and we will see later, in relation to this PEC, is that there was an attack on the core of the autonomy of states and municipalities. When I talk about the autonomy of states and municipalities, see that the ICMS accounts for about 83%, according to the numbers I have, of the state revenue, and the ISS, around 46%, varies from municipality to municipality, but we we have an order of magnitude here. And it is clear that when I suppress competence to institute, in the states, the ICMS, and in the municipalities, the ISS, I am stirring up the nucleus of the autonomy of these subnational entities.
It is stated that the IBS is not a Union tax, that the tax will be instituted by complementary law. And that complementary law is a national law, it is a law of the national state. Now, it is not true, complementary law, gentlemen, it is only that which has a significant voting quorum by an absolute majority of the members of the two houses of the National Congress. Any Union law, such as the one that institutes compulsory loans and the laws that create taxes based on residual jurisdiction, must be instituted by complementary laws and are complementary Union laws.
Therefore, I am not at all impressed by the argument that the complementary law is a national law. It is national law when law on tax laws. The national tax code is a national law, addressed to the three partial government orders, but it does not eliminate union, state and municipal legislation. On the contrary, the complementary law that institutes taxes exhausts all its normativity, leaving no residual field for the Union, states and municipalities.
The reference rates for this tax will be fixed by the Federal Senate, which is a Union body. The collection will be centralized and coordinated in the Union. The competence to judge the issues of this IBS will be of the federal justice. The possibility of changing the rates by states and municipalities is residual.
This is the central point, probably, of the great divergence that exists in relation to the theme. You find today two very clear blocks: those who understand that it is perfectly possible to institute IBS, because, after all, there is a residual competence - states and municipalities can institute rates - so do not say that their competence has been suppressed .
But then I ask, first, that this competence is not to create the tax, it is only competence to change the rates. But what is the state or the municipality in that country, where there is a bankruptcy of public powers, which in fact are all with saucers in hand, looking for the union to help him, who will reduce his rates? I would say that nobody, I think this competence is theoretical.
But it can increase tax rates. Then I imagined a municipality: the municipality increases its rates, but increases for everything. It has increased, increased for essential products and increased for certain very sensitive issues. For example, it increased and also increased for basic food and also increased the price of gasoline. What would a citizen of a small town do? He will buy in the municipality next door. The supermarket, instead of doing it in that municipality, does it in the other.
What I want to say is that this rate change competence, which I grant that it exists to some extent, but it is merely residual, this is not really an autonomy. Autonomy has been reduced from states and municipalities to a point that, in my view, implies weakening these powers - and implying a weakening of those powers, tends to abolish the federation.
As I said, it has to be uniform and it cannot affect the rates ... Here there are several issues that I will discuss because they are very specific.
And as I said earlier, who creates the tribute? Who creates the tax is the Union, who creates the tax is the Union by complementary law. It affects goods, intangible rights, and then I ask: and these new concepts, how will they look?
Professor Humberto, after your presentation and also Quiroga's presentation on interpretation, I wondered here, please imagine that this new tribute we counted 40 new concepts. But, as we will see, there are not only 40 new concepts, there are 151 constitutional provisions that have been introduced - I repeat: 151, 47 in the constitutional text and 44 in the text of the act of the transitional constitutional provisions. Everardo is correcting me here, there are 151. If mine ... if I changed 74 and 77, but anyway. 151 constitutional provisions will be introduced.
Of course, I would say, that the doctrine is going to take a lot of work and the Supreme Federal Court with its creative interpretations can actually do a lot about a new tax in harm to legal security.
In addition, we have a problem with the complexity of the new system. There is a period, I don't know if everyone is [familiar], but there is a trial period for the new system. In the first two years we will have an impact from the IBS and all other taxes. But it's a trial period, why test? As the tax is new, it changes, changes what had been established in the beginning.
And whoever programmed his life according to the first text will be surprised by changes. But not only. For 10 years, for the next 10 years we will have the coexistence of IBS with all other taxes replaced, with ICMS, with IPI, with PIS, Cofins, with Service Tax, etc.
And therefore, with compliance costs for both taxes and inspections for both taxes. I would say that the poor taxpayer will surely suffer a lot and all this, according to the authors of the project, to solve a problem of complexity and to transform this here into a simpler tribute. This would actually be a path to simplification.
But don't stop there. What is extraordinary is that the tax will actually migrate to the destination. Not just states. The final rate will not be the state's final rate, but that of the municipality. Therefore, depending on the municipality - and the competent municipality will be that of the destination. And many municipalities will lose and many states will lose. Others will win. So, if we imagine, in a country where we have 5570 municipalities, you can imagine the federative conflicts of the losing municipalities that will be demanding from the union to recover their losses.
But the project foresees losses and the project even points out that those losses have to be replenished within half a century, within 50 years. In a little while we will hear Gustavo talk about taxing the future.
And I remembered you, Gustavo, because nowadays when you think about any future ... The future in Brazil has always been somewhat uncertain, but thinking about a 50-year future, I believe that this is not an easy task, anyway, that it is not simple.
But, finally, gentlemen, here it is said that there would be no increase in the tax burden. Here I ask myself, and I asked myself and, mind you, I am making these criticisms awaiting answers, I am not here intending in any way to have an answer to all questions. I would like to be challenged.
It is said that this system will not increase the tax burden, but how will the tax rate be fixed? The rate of this IBS will be fixed by the sum of the tax burden on the federal plan, IPI, PIS and Cofins; of the states, of ICMS; and municipalities, ISS. But at the federal level, not all products are subject to the IPI tax burden, but based on this model, all products, including primary products, will also suffer the IPI tax burden. This will imply a mathematical increase in the tax burden.
Someone may say: but it is not so much, the IPI. But it is not enough. As there will still be the selective tax of competence of the Federal Government in the project, in addition to this increase in the mathematical tax burden, there will still be the creation of another tax - this one, which will affect special consumption.
And what will be special consumptions? Whatever the legislator wants. Whatever the legislator of the future wants. And this business starts with selective tax and then the selective tax starts to reach even reasonably essential products.
Therefore, in terms of tax burden, there is an increase. But example number 2 is the most extraordinary. It occurs in services. Imagine the municipalities - and in the municipalities we have small services: it is the service of the plumber, the hairdresser and everything else, whose maximum rate today is 5%. Not even professionals, because they have a fixed tax, and therefore many of those who are here today are lawyers, they know what we have as a tax burden. The tax burden, if we imagine that the maximum, and not for everyone, is 5%, the next day's tax burden would become 25%, and we would have a minimum increase of 500% on services.
I really think that the statement that this PEC does not imply an increase in the tax burden deserves some repairs and perhaps some considerations. They simply say that throwing stones is easy. I will make some suggestions. Absolutely personal suggestions, which I will pass on very quickly, which I think we should have. The first thing is with regard to federal taxes. I think it is perfectly possible, despite the fact that there are some discussions about this, the union at the federal level of IPI, PIS and COFINS - and a security problem would suffice, there being in relation to the collection proceeds, part of which was destined to social security .
I speak and I will return later. With this suppression of the competence so that the union can institute new social contributions. I want to make a repair here and I want to make a warning. I examined this proposed question of this PEC and verified the following: there is an increase in the tax burden, there is complexity and all of this is against the taxpayer.
I heard a lot here about public liberties and that the tax system should be aimed at the taxpayer. What I see is the ease of collection for the tax authorities, an increase in the tax burden for the tax authorities and more: there was no suppression, in a disruptive reform, of some things that have plagued the lives of taxpayers and that, in some way, have contributed to the current status of the tax system, such as contributions.
Who among us does not know that contributions have distorted the tax system and that contributions have resulted in a huge increase in the tax burden?
In a study that was done years ago by Fiesp on the subject, the tax burden fluctuated from 22, 23%, reached up to 35% and the great villain in the federal plan to increase the tax burden was the contributions. However, in this system, contributions would continue.
In addition, at the state level, and here comes an absolutely new suggestion, in which I am sharing with you, when thinking about this lecture, it occurred to me, which is exactly the problem of digital commerce, in fact, of the digital economy.
In the digital economy, this is a tremendous problem, somewhat unsolved, even today. How to make? We will tax and are services, are the municipalities. Are the municipalities in a practical position to collect this tax? And the field here is in fact generators, who are actually shocked to know if this belongs to the competence of states and municipalities, which would be those confronting generating facts.
I would say, everything that belongs to this digital economy, this is an idea to be deepened, should be left to the states, so that it would be taxed by the ICMS. This does not imply a change in the core competence of the municipalities. This seems perfectly possible to me, especially since the municipalities could be compensated either by transferring the collection of other taxes or even by changing the powers provided for in the Constitution itself. And the municipalities would be left with the competence of the other services.
I saw criticisms today throughout the day of what would be services and the distortion of the concept of services by the Federal Supreme Court. But the fact is that today we really have a very big doubt with licensing of assets, leasing, assignment of use and a series of things that, one thing is certain, could not be left without any taxation.
The Supreme Court comes, and it seems to me that this is the current position, and gives a very broad concept of services, as offering a utility to others, based on a set of material and immaterial activities, provided with habituality and profit motive. , which may or may not be combined with the delivery of goods.
It is a very broad definition, but it is the definition of the Supreme. I would say, the municipalities would have this competence. If we are talking about constitutional reform, constitutional reform must have a broad base, so that there are no certain goods or services that are outside the margin of taxation. This, of course, remains here for everyone to reflect on, but it is an idea.
And there are some specific questions. I start with the fees. Today, we have fees based on police power, in which they are completely distorted from their purpose. A certain fee is created, like the fee I quote here, which belongs to Fistel, the Telecommunications Inspection Fund. Only 2% of the proceeds from the collection went to the fund. The other 98% were contingent and today, in fact, were used in Federal Government expenses as any tax.
The same thing about contributions. I don't have time, I got one. A contribution to FUST, which is the Telecommunications Services Universalization Fund, which is the strongest example. 0,002% of the proceeds went to the Fund. That is, nothing. Everything was contingent and everything went to the Union. And here it is said: no, but this is just a contribution. In my view, both in fees and contributions there must be a mandatory allocation, without, therefore, contingency of what is collected, for the purpose that is its own or the fee or contribution.
In the case of fees, the fee must be sized according to the cost of the activity. And in the case of contributions, contributions should also be instituted by complementary laws, and I explain: if the residual competence of the Union requires complementary law, why not contributions that work as taxes, almost as taxes? The real practice of contributions is that they have been used as real taxes.
And whose contribution is charged? It is charged to a group of individuals affected by a particular state activity. Who should the taxpayers be? Those who belong to the group. That is the suggestion I make.
I'm being very quick about it. This theme, in my opinion, deserves a very long exposure. I believe and draw everyone's attention and I can here affirm that, in my opinion, the irrationality of the tax system, shaped by the 1988 Constitution, was certainly deformed in large part by contributions.
And here are some specific things. Provisional tax measures. It is said today, today it is read in the newspapers, that it is intended to prohibit provisional measures from imposing taxes. I have insisted for many years to read the Constitution, Article 62 of the Constitution, which says that "in case of urgency and relevance, provisional measures may be instituted".
And then my question, question no, what is the case? Is it something from the world of decisions? Someone decides something: is the case what was on my mind? Case is something that belongs to the world of facts. And therefore, when there is an event in the world of facts that is relevant, that is, it stands out in a degree of importance and that requires urgent regulatory action, only there is a provisional measure.
I know that the topic is also not that simple, but if by chance the executive branch were obliged to justify each provisional measure to say which fact occurred, which cataclysm that occurred so that I can, I, the public, the executive, edit an interim measure…
And then I ask, and I would even be interested if someone answered me, in tax matters, which case does anyone know who justified the issue of a provisional measure in tax matters? I tried. I couldn't find any. This means that provisional tax measures have been misused.
Increase in taxes for acts of the Executive. The Executive has increased taxes, import taxes, IPI, IOF, exports, without any motivation. Today much has been said here about legal certainty. I remembered a case. A long time ago, I was faced with a case in which vehicle importers had closed their exchange rates, closed their businesses, completed their operations - and although the operations were concluded, the rates were increased extraordinarily. But the vehicles were already on board. It was impossible to change that situation. And the tax authorities ended up understanding that there was no acquired right, that the Executive could actually increase the rates of surprise and without justification. And without justification.
There is no real motivation for the change of rates by the Executive. What does what mean? That the principle of legality in the matter of these taxes is very reduced, because the one who actually defines how much will be charged is the Executive Power in aggression to the principle of legality.
I think there has to be enough motivation. I imagine that in a Constitutional Reform there must be a broad non-cumulativity, something that everyone has already said. Standardization of the administrative process also seems to me essential. Ample exemption from exports.
I have already been warned that my time is about to end. And in respect of my time I shortened this ending a little, but I would like to talk a little about how I face it, what principles I think should guide this tax system.
The first of them, a pillar of all the principles, as has been said, is that of legal certainty. But legal certainty, for me not to repeat myself, is a conformity with the consolidated jurisprudence in the courts, respect for the concepts of private law, certainty of the law, predictability and coherence and rationality of the tax system.
There is a book that once caught my attention, by an Italian author, Enrico De Mita. Enrico De Mita wrote an extraordinary book to show that every tax system has to be rational. And everything that challenges, an irrationality, implies unconstitutionality.
He said: A tribute cannot be a bus that fits everything. Therefore, the system's duty of rationality, I would say, which is the duty of respect for the Constitution.
Simplification. There must be uniformity of standards, reduction of complexity. We are talking about complexity. Surely, especially in terms of compliance costs, this has been hell. What is spent in Brazil on compliance costs, the entrepreneurs present here know.
Harmony of the rules of the administrative / tax process. In each municipality in the country, in each state, we have a different administrative process.
Transparency. I passed very quickly, there are many themes. But I think that taxes have to be collected outside, and the taxpayer at the end of a circulatory process has the right to know how much he is paying, what is the tax burden that he is actually suffering.
Neutrality. In neutrality, I speak of non-cumulativeness, as I have already said, exemption from exports, measures to remove economic multi-taxation, which occurs, above all, nowadays with contributions, and to avoid tax competitive deviations.
I believe that with this model, I actually tried to just give a few quick strokes here to say that I am not absolutely comfortable with the tax reform project that is in the National Congress. And I think here that some of these things can be used in a future project or in a ride that is taken in the current project.
Question from Everardo Maciel to Hamilton Dias de Souza:
EVERARDO MACIEL: It is not surprising the quality of your exhibition and just to raise a theme here, due to the late hour, we still have the exhibition of our friend Gustavo Brigagão, ask the following: when you talked about the complementary law issue (federal complementary law, national complementary law), how would you face this issue of this project in face of what exists today in relation to the complementary law of Simples?
HAMILTON DIAS DE SOUZA: Simples is a system provided for in the Constitution, in article 170 of the Constitution. And in article 170 [it is said that] there should be privileged treatment for small businesses. In order to give concreteness and effectiveness and this principle comes the constitution of the possibility, which was inscribed in the Constitution, of having a central tax collection system that would be centralized. This existed in relation to Simples.
Simples does not absolutely prevent the existence of a normal institution of taxes by Union, states and municipalities - not least because it is optional. Therefore, for me, I believe that when it comes to the current system, the proposed system, it is nothing more than something that has already been done, I would say: this has nothing to do with Simples. Here it is creation and institution of tax by complementary law. I spoke very quickly about this, but in my opinion it is clearly a tax of the Union. A tax clearly of the Union, collected by the Union, supervised by the Union. The administrative process, also instituted by the Union.
I was talking to Quiroga, allow me to bring you a quick conversation here, because I found it interesting. Quiroga told me, to my pleasant surprise, that Schoueri, who I believe, of the jurists we know, the jurists of great name, the only jurist who had a firm stand for constitutionality. Gustavo, I heard it, but I don't know. So I don't want to put you in this, because I don't know what your position is.
But Schoueri had a position that was constitutional, and now Quiroga told me no, that he was convinced that this project is unconstitutional. Why would the project be unconstitutional? Because in fact the management committee would be completely managed in a centralized way, the whole administration ... in short, everything that refers to the management committee, would be an almost supranational body.
I want to say that I don't think this steering committee is going to be a supranational body. For me, the management committee will only be regulated by a complementary law of the Federal Union (federal Chamber and Senate), only by a specific quorum, but the regulation of all this matter will be of the Union.
When talking about a state tax, what is a state tax? It is a tax imposed by state law. And what is a federal tax? It is a tax imposed by federal law. This IBS will be instituted by federal law, so it is a federal tax. And how will the body that will regulate all this be regulated? By complementary law of the Union and, therefore, it will be a federal organ.
For me, I don't even go so far as to imagine that this steering committee will be a national body, and the participation of occasional representatives, under the terms of the complementary law, of states and municipalities in the steering committee, does not change anything. The truth is that the steering committee will surely be chaired by representatives of the Union, controlled by the Union. The tax is federal and the administrative bodies will be regulated and disciplined by federal law.
EVERARDO MACIEL: I totally agree, within our conversations we already had a more or less formed point of view and a common understanding on this subject. And therefore, I fully subscribe to what you said, and I am not going to say what someone a little more slanderous, from Pernambuco, who said that the name of this tax is not IBS, is Ibis. Ibis is the worst team in the world.