Businessmen ask Congress not to approve changes to PIS / Cofins

Associação Comercial de São Paulo and other entities evaluate that change may increase taxation on services

BRASÍLIA - The Associação Comercial de São Paulo and other entities were in Congress yesterday delivering a document against the tax increase and, mainly, the change in the PIS / Cofins calculation system. For the entities, the change may increase taxation on the service sector. The document says that “by changing the incidence on added value, depending on the rate that is established, it will cause an increase in taxation for the service sector, which will become even more unbearable, making thousands of companies and jobs unviable”. For the sector, according to the document, "instead of the propagated simplification, the measure will further increase the complexity and costs of the asphyxiating bureaucracy".

Source: O Globo (23/09)

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'Ending the Law of Good is condemning the country to delay', says association

In an article published by the newspaper O Estado de S. Paulo, on September 02, the president of the Brazilian Electronic Industry Association (Abinee), Humberto Barbato, criticized the return of charging PIS / Cofins on technology products. According to him, the country's economic crisis has already caused a drop of 17% in the sale of cell phones and 28% in the sale of computer products, and it tends to worsen with the return of the collection of these taxes. Barbato also guaranteed that such a charge will cause informality in the electronics sector to increase, making this action “a shot in the foot, as the significant drop in sales will prevent the government from meeting its collection goal” .

Source: Estadão website (02/09)


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PIS and Cofins reform will be carried out in three stages

The government will reform the PIS and Cofins in three stages. The first change, which should be sent to Congress later this month, will take place in the PIS. After a year of testing with the new PIS, it will be the turn of the Cofins reform. In a third stage, PIS and Cofins, contributions that finance social security, will be unified in a single tax in a model very similar to the Value Added Tax (VAT) charged by European countries.

Source: Estadão website (06/08)

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Government studies changes in the collection of PIS and Cofins

Source: Valor Econômico (São Paulo - SP) - 29/05/2012

President Dilma Rousseff gave the approval for the economic area to deepen the studies for the unification of the Contribution to the Financing of Social Security (Cofins) and the Contribution to the Social Integration Program (PIS). Unable to approve a comprehensive tax reform, the federal government has given priority to specific changes in the Brazilian tax system to simplify corporate tax collection.

Last Friday, the simplification of PIS / Cofins was the subject of a meeting between the president and secretaries Nelson Barbosa (executive of the Ministry of Finance) and Carlos Alberto Barreto (IRS). The coordinator of the government's Management, Performance and Competitiveness Policies Chamber, businessman Jorge Gerdau, also participated in the meeting. The unification of the rates can be done by ordinary law or provisional measure, in case it receives the green light from the president.

The discussion about changes in the PIS and Cofins was already part of the preliminary studies of the Federal Revenue, but there was no government guidance for them to gain priority. The meeting with the president shows that the matter now has a chance to get off the ground more quickly. Especially because, in addition to reducing interest rates and protecting the exchange rate to make Brazilian industry more competitive, President Dilma Rousseff has said that it is necessary to reduce taxes in the country.

In November last year, the Federal Revenue Secretary stated, in an interview with Market, that a new design for PIS and Cofins was on the agency's agenda, which hoped to reduce the legal disputes involving the complex legislation of the two taxes, the payment of which may generate tax credit. “Our Cofins regulation is the most bulky of all, and the system generates a series of distortions. Understanding how Cofins works is very complex, ”said Barreto. These changes are also an old request from Gerdau to the government.

The simplification of PIS / Cofins enters the same discussion of “sliced” tax reform that the government has been implementing since last year. The first step was the exemption from the payroll of some sectors of the economy, which started to collect the social security contribution on gross revenue. Then, already this year, the government unified the interstate ICMS rate on imported goods and merchandise at 4%, after negotiation and debate in the Federal Senate on the movement that became known as the “war of the ports”. Electricity taxation is also on the government's agenda.

Studies by the Ministry of Finance involve simplifying PIS / Cofins and reducing the cost of electricity to consumers. Both, considered “profound” but “one-off” changes should be taken by President Dilma Rousseff later this year.

PIS / Cofins earned public coffers R $ 69,2 billion in the first four months of this year - a result 1,9% higher than the same period in 2011. If the simplification under study in the economic area represents a loss of revenue, the government should increase the rate of the new unified tax. The PIS / Cofins rate today is 9,25%.

Dilma gives green light to proposal that unifies PIS and Cofins

Source: Folha de S. Paulo (São Paulo - SP) - 29/05/2012
Idea is that simplification of collection facilitates the inspection and fight against fraud 


President Dilma Rousseff gave the go-ahead for the proposal to unify two important contributions in force in the economy: Cofins (Social Security Financing Contribution) and PIS (Social Integration Program).

The simplification of the payment of these taxes was a request made by businessman Jorge Gerdau on behalf of the Movimento Brasil Competitivo. Dilma not only approved the idea but determined that her team prepare a proposal to be sent to Congress soon.

The decision is part of Planalto's strategy to individually address measures that, in past governments, were forwarded together in a tax reform and ended up being rejected by the Legislature due to resistance from states and municipalities.

The topic was discussed at a meeting with the president, last week, in which Gerdau and two secretaries of the Ministry of Finance -Nelson Barbosa (Executive) and Carlos Alberto Barreto (Federal Revenue) - also participated, as revealed by “O Estado de S . Paulo".

The idea is to create a model that simplifies the complex collection of the two taxes, which would facilitate inspection and the fight against fraud. There is still no definition for this model, but technicians from the Farm already have suggestions.

One of them provides for the merger of PIS and Cofins and ensures that payments on inputs acquired at a given stage of production are offset throughout the following stages of the production chain.

Today, in the non-cumulative form of collection (the most comprehensive), only certain inputs defined by the government generate credits that are used by companies to reduce payments in the following phases.

The expansion of tax credits has an impact on government revenue from collection of taxes, fees and contributions. Therefore, this proposal may require an increase in the rate, which will weigh on companies' cash.

According to technicians from the Treasury, it is necessary to assess the possible financial losses of the government and the forms of compensation.