Tag: simplification of the tax system

Elected government program addresses issues advocated by ETCO

At the end of October, President Dilma Rousseff was re-elected with 51,6% of the vote, in the tightest victory in electoral history. In her opening statement, the president promised to strengthen partnerships with various sectors. ETCO compiled the positions expressed during the president's campaign on the issues it advocates. Check out what the government thinks about them:

 

Reduction of tax evasion

Tax evasion was treated in a generic way in the set of proposals to simplify the tax system. In her government program, Dilma promised to advance “in reducing the bureaucracy of business processes and procedures, including tax simplification”. According to a 2012 study by the Latin Trade Group, Brazilian companies spend 2.600 hours to determine and collect taxes. “Simplification is important because, when it is difficult to remain legal, tax evasion is encouraged,” says Evandro Guimarães, ETCO's chief executive. Even with the country making little progress in simplification, the siege of tax evaders has become stronger. The adoption of the Electronic Invoice (NF-e), in addition to the increasing computerization of federal and state tax authorities, has contributed to making tax evasion more difficult. More specific measures, such as simplifying tax collection, which could reduce tax evasion have not been addressed in depth.

 

Modernization and simplification of the tax system

Regarding the tax issue, the president will face the challenge of implementing more effective measures than those taken so far. The president has been betting on specific exemption and simplification measures, which reduced the weight of the tax burden by R $ 100 billion, according to the Federal Revenue Service. However, they were not enough to leverage economic growth. Despite this, there is no sign that the strategy of making specific reforms will change over the next four years. The government should announce measures to simplify PIS, Cofins and ICMS later this year. According to the proposal, the ICMS rates would be unified and a tax credit would be created generated on the purchase of certain inputs, which would allow the deduction of PIS and Cofins from other taxes.

 

Stimulating the market economy

As soon as Dilma Rousseff was re-elected, the confidence of investors downward manifested itself in the fall of the stock market and in the rise of the dollar, which shows that the market wants a clear signal from the president about economic policy. It is also expected that a “pragmatic” team will be appointed to give investors the confidence they need to make investments. In recent months, in the face of signs of deceleration, the government has bet on exemptions granted to specific sectors in order to leverage the rest of the economy. The formula does not seem to have worked, since the predicted growth fluctuates by 1%. Credit, employment and income are stagnant. Inflation is at the ceiling of the target. The collection will hardly reach its goal in 2014. In her government program, the president understands that economic development is directly related to productivity. "Its increase will be due to the modernization of the Brazilian industrial park, the improvement in the business environment and the greater training of companies and qualification of the workforce", says the text. In the document, the government promises an uncompromising defense of the economy. Another priority is to continue social policies. In addition, promoting economic growth by stimulating competitiveness and improving the educational level.

 

Protection of intellectual property and combating smuggling

The protection of intellectual property and the fight against smuggling, piracy and counterfeiting have eluded the electoral debate. However, Dilma's government plan includes measures that address these issues indirectly. The main one is to strengthen border policing, with joint efforts by federal and state agencies, to curb the entry of arms, drugs and illegal products. In addition, the government says it will equip the Federal Police and Federal Highway Police, without detailing, however, investments and priorities.

 

Fighting corruption and improving the institutional environment

In the second round, Dilma announced a package with five measures to improve the fight against corruption. Among them, hardening the penalties against box 2, making enrichment a crime, speeding up proceedings in a privileged forum, speeding up processes of embezzlement of public resources and creating a legal device to confiscate illegally obtained goods. Three of these five measures were already included in bills in Congress. In the anti-corruption agenda, Dilma's program proposes to increase transparency through the Digital Government portal, to equip internal control bodies and to stimulate the creation of anti-corruption mechanisms in states and municipalities. The agenda also includes political reform and the expansion of popular participation in the government.

 

(With information from the newspapers O Estado de S. Paulo, Folha de S. Paulo, Valor Econômico, Bom Dia Brasil, Veja Online Portal and the Government Program of Dilma Rousseff)

 

 

 

 

Expansion of Supersimples becomes law

(Diário de Pernambuco - 29/10)

Simple national

"Tax reform has already started with Supersimples", says Minister Afif Domingos.

The chief minister of the Secretariat of Micro and Small Business, Guilherme Afif Domingos, said in an interview that the new term of re-elected president Dilma Rousseff (PT) already begins with the tax reform in progress, with the new Supersimples Law, approved this year by the National Congress and which comes into force as of January 1. "This is the big tax reform, we started with Supersimples", highlighted the minister.

The complementary law that universalizes Supersimples was signed on August 7 of this year by President Dilma Rousseff, establishing a differentiated taxation system for micro and small companies that unifies eight taxes collected by the federal, state and municipal governments in a single bill and reduces, on average, the tax burden by 40%. In addition, it provides for speeding up the processes of opening and closing companies. According to data from the World Bank, this process in the country could last more than one hundred days and with the new law, everything will be done in just one counter and within the maximum period of five days.

The criterion for adhering to the new system will be annual sales, with a ceiling of R $ 7,2 million for companies that export and R $ 3,6 million for those that operate in the national market. The change is expected to benefit 142 categories and about 450 thousand developments.

To read the full story, click here

 

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

 

Click here and read the full article

Efforts to end the fiscal war

etco-articulates-for-the-end-of-fiscal-warETCO articulates mobilization to end the fiscal war. Idea is to form a parliamentary base from the states that granted incentives to keep the topic on the agenda later this year

ETCO's executive president, Evandro Guimarà £ es, said at an event held in Sà £ o Paulo (SP), that the institute defends an immediate mobilization in Congress for the end of the fiscal war. The statement was made on September 26 to representatives of companies at breakfast promoted by the Machado, Meyer, Sendacz and Opice Advogados office.
â € œ ETCO is willing to be one of the private sector's interlocutors in Congress on this issue. We want to sensitize a minimal parliamentary base from the states that have granted incentives to keep the discussion on the agenda, â € said Guimarà £ es. On the agenda, according to him, there are dialogues with parliamentarians, finance secretaries and, eventually, representatives of the federal executive. He stated that the legal uncertainty resulting from the fiscal war causes paralysis of investments in the country. Without knowing whether they will be obliged to return tax installments waived in the past by the States, and without clear rules for future incentives, companies have been delaying new investments. Guimarà £ es also said that the executives of these companies face an â € œFreudianâ € dilemma on the issue. â € œOn the one hand, managers cannot dispense with the incentive to achieve results. On the other hand, they do not know whether they are already informing shareholders about the possible risk of being asked to return taxes retroactively.â € ETCO understands that the solution of the fiscal war should be sought in Congress, where it is possible an agreement on the supposedly outstanding debts and on the rules for a transition. The entity also believes that the Senate Bill 130/14, reported by Senator Luiz Henrique (PMDB-SC), which alters the voting rules in the National Council of Farmer Policy (Confaz), may be an initial step towards peacemaking. On the Senate portal, Luiz Henrique stated that the resistance of the government base to the project, the biggest obstacle to its approval, was overcome with a recent declaration by President Dilma in favor of the proposal. The vote on PLS 130/14, in the opinion of Evandro Guimarà £ es, would demonstrate the Legislative's concern with the issue and would prevent the resolution of the fiscal war directly in the Supreme Court Federal (STF). The supreme court has already ruled in 29 Direct Actions of Unconstitutionality (ADIs) that incentives granted without the consent of Confaz are unconstitutional.

Guerrilla warfare - Until an agreement is reached on the issue of incentives, the legal uncertainty resulting from the fiscal war continues to cause paralysis in investments and an avalanche of lawsuits in the courts. In addition to the ADIs in which the states litigate each other in the STF, tax authorities have also “glossed” billions of reais in tax credits as a result of incentive transactions originating in other states. This situation has also led to the Supreme Court in which States complain about ICMS revenues generated in other Federation units under an incentive regime. “It is not possible to transfer to the Judiciary the constitution of the tax credit, nor to impose on the taxpayer the burden of the tax war”, commented at the end of the event the partner of the tax area of ​​Machado, Meyer, Sendacz and Opice, Daniella Zagari.

Expansion of Supersimples to the service sector becomes law

President Dilma Rousseff signed, last Thursday (07/08), the proposal (PLP 221/12) that benefits about 450 thousand micro and small companies from 142 activities. They will now have access to Simples Nacional or Supersimples, the simplified tax system that unifies eight federal, state and municipal taxes into a single bill.

Shortly after the sanction, the chief minister of the Secretariat of Micro and Small Business, Guilherme Afif Domingos, celebrated the change in the concept of Supersimples, which is no longer based on professional activity but focused on the billing of the enterprise and stated that the main benefit it was the universalization of the system.

In practice, the law benefits all legal entities that fit as microentrepreneurs, microenterprises and small companies, with an annual gross revenue ceiling of R $ 3,6 million. For the service sector, a new rate table (16,93% to 22,45%) was created, which varies according to the activity, such as law, brokerage, medicine, dentistry and psychology, among others.

The law arose from a project by Deputy Vaz de Lima (PSDB-SP) and was consolidated in the substitute of the rapporteur in the Chamber, Deputy Claudio Puty (PT-PA), for whom, the scope of Supersimples is seen as a package of public policies integrated, which involves reducing bureaucracy, reducing the tax burden and complying with the constitutional provision for different treatment for micro and small companies.

Reduction of bureaucracy

Several actions guarantee the reduction of bureaucracy in the processes of opening and closing companies. A unique register of entrepreneurs is created, centralized in the CNPJ, with the end of state and municipal registrations. The so-called tax substitution, used by the states to anticipate ICMS rates, also ends.

In the advocacy sector, Minister Afif Domingos predicts that the inclusion of the activity in Supersimples should increase the number of offices from the current 25 thousand to 125 thousand, soon.

Due to the tax legislation and agreements closed during the process in Congress, some provisions will only come into force on January 1, 2015. Others become effective, in fact, only in 2016, such as the prohibition of tax substitution in some sectors.

Source: Chamber News Agency

Low growth of the Brazilian economy in 2014 may affect the agricultural industry

The low growth forecast for the Brazilian economy in 2014 may affect the agricultural industry, concluded several participants at the 13th Brazilian Agribusiness Congress, held in São Paulo.

“We had a period of accelerated productivity in the Lula government and a slowdown in Dilma's, but despite the change, there is a trend in the permanent tax burden,” explained Samuel Pessoa, a researcher at the Brazilian Institute of Economics (IBE).

Pessoa attributed the productive slowdown to low investment, and the forecast of growth analysts in the agribusiness sector was 0,6%, a percentage considered low.

Financial market analysts reduced Brazil's growth forecast for 10 for the 2014th consecutive week, which was 0,86%, against the 0,9% projected last week, the Central Bank reported today.

Despite the projection of minimum growth for agroindustry and a reduction in the country's Gross Domestic Product (GDP) this year, the vice president, Michel Temer, highlighted the "success" of the agricultural sector at the same congress.

“Agribusiness is one of the engines of the national economy and a good percentage of GDP, has an extraordinary prestige from the government through subsidized interest and incentives of the most varied”, pointed out Temer.

The vice president denied the criticisms that the credit lines are not reaching the sector and specified that the government makes "loans" with interest reduction and extension of the payment terms of the credit debts.

However, Pessoa stated that it is “common” that the impact on the level of productivity is associated with the dynamics of the international market, but in the case of Brazil, this premise does not fully apply because the economy is “closed” to the price of exports and imports .

After the 2008 crisis, Pessoa added, Brazil went through a period of high prices for raw materials, with a devaluation of the dollar and inflationary instability, factors that oppose a signaling of the dynamics of the international economy as the only one responsible for the “brake” for agribusiness.

According to the analyst, for an increase in productivity, it is necessary “a maturation of institutional public policies” and an increase in the exchange rate, which has fluctuated around R $ 2,25 for each US $ 1.

Without changes, Pessoa believes that the country will undergo a reconfiguration of the inflation scenario, which fluctuates close to the limit of the official target, of 6,5%, and by a “certain exchange control”.

"We have to do an urgent tax reform, Brazil does not have a favorable environment for business and we are by far the worst country in this item", he evaluated.

In this sense, the political analyst Christian Lohbauer, said that before reevaluating the economic policies for the sector, the challenge is to ensure that sectors outside the rural area are attentive and informed about the country's agricultural development.

“Agroindustry is an activity that generates exports, moves and is saving the country's economy”, defended Lohnauer at the event.

Regarding the criticisms of the tax burden and its interference in the agribusiness, Temer admitted the "difficulties" to implement a tax reform in Brazil.

“It is a delicate issue. Tax reform does not go ahead. So the government gave benefits to the country's productive sectors, making a kind of “sliced” reform, which will continue to happen ”, he stressed.

Source: Exame Online Portal

ETCO subscribes to the Tax System Simplification Program delivered to Dilma Rousseff

Under the coordination of the Commercial Association of São Paulo, the project gathers suggestions to adapt the legislation to the current demands of Brazil

The Brazilian Institute of Competition Ethics (ETCO) is one of the entities responsible for preparing the proposal for the Simplification and Rationalization Program for the Tax System delivered on May 6 to President Dilma Rousseff, during the inauguration ceremony of the new presidency of the Associação Comercial de São Paulo (ACSP) and the Federation of Trade Associations of the State of São Paulo (Facesp).

Coordinated by ACSP, the program is the result of the actions of a working group composed of ETCO, the Federation of Trade in Goods, Services and Tourism of the State of São Paulo (Fecomercio-SP) and the Union of Accounting Service Companies, Advisory, Expertise , Information and Research of the State of São Paulo (Sescon-SP).

The initiative comprises a set of rules to improve the Brazilian tax system, including a proposal for a constitutional amendment (PEC), a preliminary draft law (PLC) and a preliminary draft law (PL). The three measures are connected and serve to simplify and streamline processes, provide greater legal certainty, change some provisions of the National Tax Code and adapt the legislation to the current demands of Brazil.

This initiative was made in line with the intention, expressed by the President in her inauguration speech, to modernize the Brazilian tax system based on the pillars of simplification and rationalization.

For ETCO's Executive President, Roberto Abdenur, “the complexity of the Brazilian tax system is today one of the main motivators of tax evasion and informality that hamper the process of formalizing the economy and, ultimately, the country's development”. He also recalls the impact on the collection by governments of resources that should be used in more investments in infrastructure and services to the population. “Simplifying and rationalizing the Brazilian tax system is one of the most urgent initiatives in order to reach higher stages in the process of inserting Brazil in the world economic scenario”, says Abdenur.

Among the measures suggested in the PEC are to prohibit the collection of taxes before six months of the law that instituted or expanded them (currently the term is 90 days). In the draft law, there are actions such as the regulation of financing and refinancing of tax debts, amnesty restrictions, so that this type of benefit is granted only in cases of calamities and debts of small value, and the obligation of the Public Treasury to publish, in the previous year, the selection criteria for the annual Individual Income Tax return, among others.

 

Entities propose simplification of the tax system

Legal Consultant - São Paulo / SP - LAWS - 09/05/2013

A proposal for the Simplification and Rationalization Program for the Tax System was delivered on Monday (6/5) to President Dilma Rousseff. Coordinated by the São Paulo Commercial Association, the text was prepared by a working group composed of the Brazilian Institute of Ethics in Competition (ETCO), the Federation of Goods, Services and Tourism of São Paulo and the Union of Accounting Service Companies, Advisory, Expertise, Information and Research of the State of São Paulo

The document brings together a set of rules to improve the Brazilian tax system, including a proposal for a constitutional amendment, a draft supplementary law and a draft ordinary law. The three measures are connected and can serve to simplify and streamline processes, provide greater legal certainty, change some provisions of the National Tax Code and adapt the legislation to the current demands of Brazil.

According to the executive president of ETCO, Roberto Abdenur, “the complexity of the Brazilian tax system is today one of the main motivators of tax evasion and informality that hamper the process of formalizing the economy and, ultimately, the country's development itself ”.

Among the measures suggested in the PEC is the veto to issue a provisional measure on tax matters, to avoid legislative excesses of the Executive. The proposal argues that Constitutional Amendment 32, of 2001, which prohibits the increase or reduction of taxes on imports, exports, industrialized products and credit operations (present in article 153 of the Constitution) and extraordinary tax provided for cases of external war or its imminence (foreseen by article 154 of the CF) was not enough to restrict the changes.

In order to reduce legal uncertainty, it is suggested that the minimum period for the start of tax liability should be six months, and not the 90 days provided for by the Constitution. The entities also defend the revocation of the impediment of hiring by the government or of granting benefits to companies in debt with the social security system.

In the draft laws, the regulation of financing and refinancing of tax debts, amnesty restrictions are claimed so that this type of benefit is granted only in cases of calamities and debts of small value. It is also suggested that the Public Treasury must publish, in the previous year, the fine mesh criteria, in addition to setting maximum values ​​for fines. With information from the ETCO Press Office.