Government must propose tax changes after the second round

The government is working to implement a tax reform later this year, with the simplification of PIS, Cofins and the unification of ICMS, but none of these measures should come out before the second round, said the Minister of Finance , Guido Mantega, this Monday (13th).

Source: FOLHA.UOL - 13/10


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Taxation gains prominence in elections

The government should announce economic measures to simplify PIS, Cofins and ICMS later this year. According to information published in the press, the proposal provides for the unification of ICMS rates and the creation of a tax credit generated on the purchase of certain industrial inputs, which would allow the deduction of PIS and Cofins from other taxes.


The reform of the PIS / Cofins would impact the public coffers by R $ 15 billion. “There is a possibility during this year that we will be able to do both, the ICMS and the PIS / Cofins,” Finance Minister Guido Mantega told the press. According to him, the proposal for the unification of the ICMS can also contemplate the reduction of rates and the creation of a fund to compensate States for losses in collection.


Mantega made a point of saying that the measures have no connection with the electoral agenda of the candidate for reelection, Dilma Rousseff. “We have been working at PIS / Cofins for some time, so it will be retired. However, there is no deadline to be ready. It certainly will not be in these two weeks of elections, it will be for later, but still this year ”, guaranteed Mantega.


In her campaign for re-election, President Dilma Rousseff showed that, if re-elected, she must maintain the strategy of carrying out a “sliced” tax reform, prioritizing the simplification of taxes. "Simplification can be done as quickly as possible, but it cannot be by decree," economist Rodrigo Sabbatini, of the candidate's team, told the press. According to the IRS, the measures implemented so far have reduced the tax burden by R $ 100 billion in 2014 alone.


The coalition led by candidate Aécio Neves defined in its government program, launched at the end of the first round, three guidelines for tax reform, which aim to simplify. The candidate, if elected, intends to unify taxes on the same basis, take advantage of credit balances with the Tax Authorities and make a single registration for individuals and companies, in order to facilitate the collection of taxes.


In an interview to the press, the economic coordinator of Aécio's campaign, Armínio Fraga, said that the proposal is to unify in a single tax called VAT - Value Added Tax - ICMS, IPI, PIS and Cofins. According to Fraga, Aécio would have the capacity to negotiate this proposal with the States, giving them certainty about the eventual loss of revenues from changes in the ICMS.


ETCO understands that tax simplification is an essential issue for Brazil's economic growth, and has contributed to proposals. The simplification advocated by the entity is based on the adoption of measures that result in greater transparency, reduction of bureaucracy and inspection. “Priority themes are the unification of tax registers, the rationalization of registration procedures and the withdrawal of taxpayers, the prohibition of the use of negative debt certificates as a political sanction, in addition to the restriction on the requirements of accessory obligations”, understands the adviser of the Everardo entity Maciel.


According to him, the debate on the tax issue unfolds on three different levels. The first is the size of the tax burden, which refers to the size of public spending. There is also the issue of fiscal federalism, which involves debates about the discrimination of public incomes, their criteria for sharing and the distribution of public charges among federal entities.


ETCO's chief executive, Evandro Guimarães, reinforces that the tax simplification agenda must also include the simplification of the calculation and collection of taxes. “Companies spend 2.600 hours a year to pay taxes. We need a simpler tax system, with fewer taxes, which ensures taxpayers the right to legal certainty, ”he says.


The president of the Union of Accounting Services Companies (Sescon-SP), Sérgio Approbato Machado Júnior, points out that the adoption of a fair tax system begins with the reduction of public spending. "No type of reform will be good for everyone, unless there is a reduction in the size of the State and effective management of resources", he says.


Also according to the leader, Brazil has an unnecessarily complex legal tax framework and a high number of accessory obligations to be fulfilled by taxpayers. "If the new president has the courage to face these problems and propose a national debate, in a neutral way, we will already have a great advance."


(With information from DCI Newspapers, O Estado de S. Paulo, Folha de S. Paulo, Valor Econômico and Veja Online Portal)