Tag: Tax Simplification

With the floor, Joaquim Levy

Minister of Finance closed the X ENAT talking about the progress made in the meeting, tax simplification and resumption of growth

 

Minister of Finance, Joaquim Levy, at the closing ceremony of the X ENAT
Minister of Finance, Joaquim Levy, at the closing ceremony of the X ENAT

The closure of X ENAT was attended by the Minister of Finance, Joaquim Levy. He thanked the participants, spoke of the importance of collaboration between the tax authorities of the Union, states and municipalities to increase the efficiency of tax collection, highlighted the need for tax simplification and also spoke of his expectations regarding the resumption of economic growth. Check out the main sections.

 

The work of tax administrators

Joaquim Levy: Tax administrators have an essential, essential and indispensable role for the maintenance of the State, the capacity of the public sector to be providing benefits for the entire population, such as national security, individual security, health, education. This work must always be recognized.

ENAT's achievements

Joaquim Levy: Since 2003, when ENATs started, we have evolved a lot. This is a highly technical meeting, but it has a huge impact on the economy. The advances that were achieved at the meeting show the importance of working together. Of course, the other side [that of the tax evaders] has also shown itself to be increasingly sophisticated. The expectations of circumventing the tax authorities are increasingly sophisticated, which is why we also have to keep advancing and developing new tools.

Tax simplification

Joaquim Levy: We are often penalized in international rankings [for the quality of the business environment] for the perception that it is difficult to pay taxes in Brazil. And sometimes it is, because we are a federation, because there are differences, because the tax burden ends up being high to provide revenues that are quite significant for a country like ours, so that we can pay all the benefits that are legislated. But I think that even guaranteeing the level of revenue that the country needs, there are ways to continue working on simplification. The key word for Brazil now is productivity. The advances achieved within the scope of ENAT will increase our capacity to collect and at the same time facilitate the lives of those who produce, those who are there generating wealth and well-being for the population, who are the taxpayers.

Fiscal adjustment and resumption of growth

Joaquim Levy: We are going through a moment of important adjustment, of a rebalancing of the economy. Despite the turbulence, our economy has already responded positively to some measures that were taken at the beginning of the year. I am absolutely convinced that, once the turbulence is over, the economy will make an important recovery and we will also see the revenue increase. I believe that the potential of our economy is present and the possibility of recovery, even next year, is not negligible.

Electronics and wine manufacturers demand changes in the MP that raises taxes

Producers of electronics and hot drinks, such as wine and cachaça, demanded changes in the provisional measure that raises the tax on these products (MP 690/15). In a public hearing on Wednesday (14), manufacturers of the affected products estimated that government revenue from the measure will be low and that the negative impact will be “disastrous” on production, job creation and the consumer's pocket.

Public hearing of the Mixed Commission on MP 690/15, on the incidence of the Tax on Industrialized Products - IPI, beverages and electronic products. Dep. Celso Maldaner (PMDB-SC)

Lucio Bernardo Junior / Chamber of Deputies

Celso Maldaner: the Agricultural Parliamentary Front is mobilized to overthrow the MP, if the text is not changed

The MP was issued at the end of August, but some rules only begin to apply in 2016, with the expectation of increasing government revenue by R $ 8,3 billion.

The measure changes the calculation of the Tax on Industrialized Products (IPI) that focuses on wine, cachaça, whiskey, vodka, rum and other hot drinks. Instead of a fixed amount of IPI for a given quantity produced (ad rem rate), as is the case today, the tax will be calculated with varying rates (10% to 30% according to the drink) on the value of the product (ad valorem rate ).

Abusive load
For the vice president of the Brazilian Association of Importers and Exporters of Beverages and Food, Orlando Rodrigues, the measure will have an opposite effect to the government's intention to increase tax collection.

“It may generate an abusive and disproportionate tax burden, which can present increases of up to 500% in the value of the tax, with the generation of chain taxes. Increasing these taxes, at a time when consumption fell in restaurants and stores, would be just another way to increase unemployment that is already starting to happen in the sector, ”said Rodrigues.

According to the calculations of the Organization of Brazilian Cooperatives (OCB), the change in the calculation of the IPI will increase the price of each bottle of wine, for example, by R $ 2 to R $ 5.

OCB President Marcos Caetano added that, in the case of wine, the cooperatives will not be able to pass on the tax increase to the final price of the product. “The impact is very negative. There are cooperatives that bring together more than a thousand smallholder families. ”

The executive director of the Brazilian Institute of Cachaça (Ibrac), Carlos Lima, cited “irreversible damage” to stills in the country, starting from MP 690: effective increase of 158% to 300% in the final value of the IPI, more informality, less sanitary control and risk of closure. According to Ibrac, the country has 11.124 cachaça producers.

Fall in sales
The complaint of the electronics and information technology sectors was also widespread, since MP 690 ends the exemption of PIS / Pasep and Cofins granted, in retail sales, to computers, smartphones, routers and tablets.

In principle, this exemption, provided for in the so-called Lei do Bem (Law 11.196 / 05), should apply until the end of 2018, but the government claims that the benefit has already fulfilled its function.

The president of the Brazilian Association of the Electrical and Electronic Industry (Abinee), Humberto Barbato, classified the expectation of government revenue with the MP 690 as “illusory”, especially given the forecast of a drop in the marketing of products that will lose the benefits of the Well. "It's a shot in the foot," he said.

In the same vein, the president of the Etco Institute, Evandro Guimarães, stressed that the provisional measure may increase the informality of the Brazilian economy. “The country's fiscal situation is really serious, but attention is needed to products that are already the target of smuggling, piracy, counterfeiting and embezzlement. This scenario of encouraging crime worsens with each tax increase, ”he warned.

The president of the Federation of Associations of Brazilian Information Technology Companies (Assespro), Jeovani Salomão, also complained that the changes envisaged in the MP cancel any profits from small and medium-sized companies that dominate the sector.

The president of the Brazilian Association of Information and Communication Technology Companies (Brasscom), Sérgio Gallindo, adopted an even more dramatic tone. “The cost of MP can be the ruin and the message of horror for a sector that was Brazilian China,” said Galindo, referring to the increased participation of the information technology sector in the Gross Domestic Product (GDP) and the generation of 88 thousand jobs until 2014, according to the entity.

Digital exclusion
The president of the National Union of Telephony and Cellular Mobile Service Companies (SindiTelebrasil), Eduardo Moreira, stated that the measure undermines national broadband and digital inclusion programs, in addition to encouraging smuggling and punishing a sector that has contributed to the country's GDP.

“What the Brazilian population most wants today is a cell phone with access to the internet. We are pushing the population to stop buying it or to go and get it from the smuggler, ”said Moreira.

He recalled that the country has a strong demand for connectivity and that, today, 63% of internet accesses are made through cell phones with broadband. "This represents a need for more investments and not barriers for a sector that employs 500 thousand people", he said.

To illustrate the high tax burden in the sector, Moreira informed that companies paid R $ 33 billion in ICMS alone in 2014.

Agricultural Front
The president of the mixed commission that analyzes the MP, deputy Celso Maldaner (PMDB-SC), informed that, sensitized mainly with the situation of the small wine producers of the Country, the Agricultural Parliamentary Front is already mobilized to overturn this provisional measure, in case the text is not changed.

“It is a hard stop. The front is working very hard today not to approve this provisional measure. So, it is interesting for us to find a negotiation path in order to arrive at a good solution ”, said Maldaner.

Tax adjustment
The commission's rapporteur, Senator Humberto Costa (PT-PE), promised to take the complaints mainly to the IRS. Costa admitted that there are doubts about the effectiveness of the measure in generating the revenue intended by the government and, therefore, it would be possible to seek alternatives with less impact on the productive sector.

“We all advocate fiscal adjustment, but, logically, it should not be our goal to allow any sector to be tougher than others. We will try to build something close to a consensus. For all I have heard so far, we have some leeway to try to work, ”said the rapporteur.

Deputies Luis Carlos Heinze (PP-RS), Bilac Pinto (PR-MG) and Edinho Bez (PMDB-SC) reinforced the request to resume negotiations with the government in order to change the MP. “I find it difficult for Congress to approve an increase in the tax burden at this time of economic crisis. Either go ahead in the negotiation or the MP will be immediately rejected at the plenary session of the Chamber ”, warned Bilac Pinto.

MP 690 is still under analysis in the mixed commission. Subsequently, the measure needs to be approved by the House and Senate Plenaries by the 29th to avoid losing its validity.

Reportage - José Carlos Oliveira
Edition - Pierre Triboli

Source: Home .

Additional bibliography: Taxation

  • Taxation Manual In The Financial Market, by Paulo Marcelo Oliveira Bento, Rafael Macedo Malheiro, Ramon Machado Castilho, Renato Reis Batiston, Renato Souza Coelho. Editora Sraiva, 2011.
    What taxes are levied on financial transactions? Does capital gain on fixed income funds be subject to income tax? Does the application term interfere with taxation? What is more interesting for the investor? Is there a difference between the taxation of individuals and legal entities? What credit operations does the IOF apply to? Is there a service tax levied on the intermediation made by securities brokers? These and other issues are addressed by the authors in this book, which also looks at regulatory acts issued by tax authorities.
  • Taxation and Tax Benefits in Foreign Trade, by Gilvan Brogini. Editora Ibpex, 2008.
    The tax burden is now a topic of great interest in foreign trade, as it represents a considerable part of the costs of companies, which can affect their competitiveness both in the domestic and foreign markets. In addition to dealing with taxes on the interpretations and exports of goods and services, this book specifically addresses the tax benefits that can be granted for these operations. And the best, with a simple language and in a didactic and organized way.
    Knowing these tax benefits allows you to improve the tax planning of companies that work with foreign trade and also find ways to minimize the effects of taxation. This can make a difference in an organization's performance. It is for this reason that this work is of fundamental importance for professionals and students who wish to have a successful performance in the area.
  • Indirect Taxation in Developing Economies, by John F. Due. Editora Perspectiva, 1974.
    Fiscal policy and development - A hot topic. What is the role of indirect taxation in developing economies? What is the relationship between income distribution and indirect taxation? What is the basic difference between direct and indirect taxation? John F. Due, Ph. D at the University of California and Professor of Economics at Illinos, proposes such themes through a detailed analysis of the three main forms of indirect taxation. The author, consultant and expert of several governments, using data obtained first hand on the Philippines, Venezuela, Honduras, El Salvador, Zambia and other countries of the British community in Africa, with studies on the United States and Canada, access to reports from the World Bank and abundant bibliography from the International Monetary Fund, performs responsible, objective work that will constitute itself for the Brazilian reader in a matter of vivid news.
  • Tax Research new series - Taxation in Mercosur - 2nd edition, by Ives Gandra da Silva Martins. Publisher Revista dos Tribunais, 1997.
    Starting from four questions formulated on the tax aspects provided for in the Treaty of Asunción, several authors discuss the proposed theme, in order to present the most diverse understandings on the matter. Work that arises from the work for the XXII National Symposium on Tax Law, carried out by the University Extension Center, addresses, in depth, issues arising from the need to make the various national laws compatible with a supranational legislative complex. This edition has an introductory study by Edison Fernandes, a recognized expert in the field, because, although the proposed questions remain without a satisfactory and definitive solution, therefore, the timeliness of the works is preserved, complementation was necessary, aiming at a vision comprehensive view of Mercosur's legal profile.
  • Globalization, Regionalization and Taxation: the New World Matrix, by Alberto Nogueira. Editora Renovar, 2000.
    In this work, taxation is analyzed in an integrative and harmonious way with the current waves of globalization and regionalization. Due to its interdisciplinary nature, this work is aimed at lawyers and other legal operators, students and professors, especially those who work in the area of ​​Legal and Social Sciences and, more especially, those interested in the infinite world of taxation.
  • Internet Taxation, by Ives Gandra da Silva Martins. Publisher Revista dos Tribunais, 2001.
    The following questions were asked to employees: 1) What is the meaning of the expression “communication service” contained in article 155, item II, of the FC? Can it be applied to an internet access provider for tax purposes by ICMS? 2) Is the purchase of software by download, between a user in Brazil and a website abroad, subject to ICMS tax and Import Tax? 3) Can the Brazilian tax authority request taxpayer data from the Internet access provider, without prejudice to Article 5, item XII, of the Constitution? 4) Does journalistic and editorial communication, via the Internet, enjoy the tax immunity of article 150, item VI, letter d, of the CF? The results of the works were compiled in the present work.
  • Taxation in the Globalized Economy, by several authors. Editora Form Três, 1999.
    Taxation in the globalized economy (debate on principles and a proposal for tax reform). Realization of the union of fiscal agents of income of the State of São Paulo.
  • Taxation in Brazil and the Single Tax, Marcos Cintra. Makron Books Publisher, 1994.
    Taxation in Brazil and the Single Tax. This tax revolution would eliminate all tax bookkeeping and end the requirements for declaring assets, issuing invoices, filling out guides and forms. The single tax would have automatic and unbureaucratic collection, directly in the banking system, ending the inspection of companies and individuals.
  • Taxation of the Third Sector in Brazil, by Leandro Marins de Souza. Dialectical publisher, 2004.
    After dealing with historical-constitutional aspects of the Third Sector, the author takes care of several legal matters related to the theme, including the forms that can be adopted by the entities belonging to him, especially developing his tax regime.
  • Taxation of Brazilian and International Trade, by Alfa Oumar Diallo. Editora Método, 2001
    The work of Prof. Alfa Oumar Diallo complies with such scientific programs, maintaining a unity of method in the presentation of legal matters, while respecting their respective practical application. Built on this proposal, the book is divided into three well-defined parts. A first, in which he analyzes the National Tax System and customs taxes. The second, aimed at studying revenue renunciation regimes in favor of foreign trade, appreciating the various techniques used: exemptions, incentives, drawback etc.

Revenue wants to replace PIS / Cofins with a new tax

The Federal Revenue is studying changes that could lead to the extinction of the so-called PIS / Cofins, source of more than 20% of the Union's tax resources (about R $ 86 billion of the R $ 414 billion collected from January to April 2015). The idea is to replace it with a single social contribution, with a single rate. The goal is to approve the change in Congress this year so that it takes effect in early 2016.

The impact on the total amount paid by companies should be neutral, believes the IRS, for whom the measure will reduce the administrative costs of taxpayers. This is because it will simplify taxation, the complexity of which is widely recognized by the Ministry of Finance, which is linked to the Federal Revenue Service.

This legal mess that they call PIS / Cofins includes different taxation regimes, specific treatment for various sectors of the economy and different rates. In the case of Cofins, the highest reaches 7,6% of the company's revenue, which brings the maximum rate of the two taxes to 9,25%.

One of the most controversial aspects of this taxation model is that it allows, in theory, to offset certain credits, relative to the costs accumulated by companies along the production chain. In practice, its rules are so complicated that many taxpayers end up not making the compensation to which they are entitled. The IRS signs a formula that will simplify this process, making it possible to effectively offset all costs incurred.

If the Revenue plan works, the Contribution to the Financing of Social Security (Cofins) and the Programs of Social Integration and Formation of the Civil Servants' Heritage (PIS / Pasep) - which together became known by the acronym PIS will be retired. / Cofins.

End of statements

Also in line with tax simplification, the area's technicians are working on a proposal to eliminate several declarations that companies are currently required to provide to the government. Among them, the corporate income tax return (IRPJ). It is even considered to end the Annual List of Social Information (Rais), which every legal entity is obliged to send each year to the Ministry of Labor.

Gender statements form some of the so-called "ancillary obligations". That is, all the bureaucratic procedures associated with taxes or legal records that any existing organization in the country is forced to follow in order to keep up with the Tax Authorities and other State institutions: rules for issuing invoices, sending information, bookkeeping accounting books, etc. Such obligations provide a rich source of information, including to facilitate tax investigation. But they account for a significant part of the normative maze that is the hallmark of Brazilian tax legislation.

Changing part of this infernal reality will be possible because of the modernization of data processing reported by taxpayers. “With the electronic invoice, for example, what is informed by the taxpayer enters the database immediately. This will allow, through the crossing of information or the integration of different systems, to eliminate various requirements, greatly simplifying the taxpayer's life ”, explains a technician involved in the studies.

Source: Congress in focus (15/06)

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States threaten to give up the ICMS agreement

A week after announcing an agreement on the reform of the tax rates on goods circulation (ICMS), the governments of states in the Northeast region are already showing signs of discontent with the Ministry of Finance and some even threaten to withdraw their signatures. of Agreement 70, a document that establishes the new bases of the tax.

Source: Valor Econômico (14/04)

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Light at the end of the fiscal war tunnel

Senate approves proposal that regularizes the past of tax incentives in the country; understand what is at stake and the next steps of this project

 On the 7th of April, the Senate plenary approved a complementary Bill (PLS 130/2014) that reduces the legal uncertainty surrounding the tax incentives granted by several states to attract investments. It regularizes the situation of companies benefiting from a reduction in ICMS. The project was sent to the Chamber of Deputies (PLP 54/2015). The procedure in Congress is essential so that the solution does not occur through the Judiciary. To end the fiscal war, other complementary measures are needed and the States, through Confaz, continue to negotiate.

 

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Fiscal adjustment comes to Simples Nacional

Simple nationalThe need for fiscal adjustment will cause the government to change the bill that expands the coverage of Simples Nacional in order to avoid loss of revenue. According to the Minister of Micro and Small Business (MMPE), Guilherme Afif Domingos, there will be a fine-tuning in the process so that the conditions for entrepreneurs improve, without budgetary impact. "The Federal Revenue Service is extremely concerned with avoiding the impact of exemptions," he said.

The government is considering presenting a substitute for the bill that is being processed in the Chamber of Deputies until March 19. It will propose a more modest increase in the annual revenue cap for industries that want to join the program. The current R $ 3,6 million would go to R $ 7,2 million and not R $ 14,4 million from the current text. The MMPE minister admits that the exemptions are hampered by the need for fiscal adjustment, but stresses that without it, there will be no resumption of growth.

Afif did not detail other changes under study, nor did he estimate the loss of potential revenue from the ongoing project. The minister believes that the approval of the project is not threatened by the government's disagreement with the allied base. According to him, the Micro and Small Business Front should have more than 300 congressmen. “Today the Congress is touched by dissent. If there is a consensus, it is this. ”

Source: Electronic Review / Correio Brasiliense (12/03)

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Tax fabulations

Everardo Maciel, former Federal Revenue Secretary and ETCO Advisor
Everardo Maciel, former Federal Revenue Secretary and ETCO Advisor

The usual complexity of the tributes also contains an aura of mysteries, which, in turn, constitute a generous territory for fabulations.

Thomas Piketty, a French economist, soon became a media star, due to the resounding editorial success of “Capital in the XNUMXst Century”.

It is an analysis of income and inequality in contemporary society, full of opportune literary references and founded on a formidable collection of statistics and historical facts.

The deserved success will, ironically, contribute to the increase of inequalities, due to the fortune that the author will accumulate with conferences and book sales.

The fascination with media gestures is perhaps what explains the author's refusal to “Legion of Honor”, ​​a commendation granted by the French government, under the argument that honor cannot be bestowed by the State.

Less, Piketty. The title of the commendation reproduces only a consecrated Gallic tradition. Were it not for the State, who should deliver the commendation?

What is most impressive about Piketty, however, is his insistence on proposing, as a remedy for inequalities, a confiscatory taxation of capital rents and inheritances, on a world scale.

North Korea's and the Islamic State's comments on the proposal are not known, but among experts, except those linked to blind ideological commitments, there was a unanimous rejection, as it is an insubstantial and unviable thesis.

Regarding the proposal, the comment made by Wolfgang Pauli (1900-1958), an Austrian who was awarded the Nobel Prize in Physics, when compelling a work by a colleague: “it is not even wrong”.

To placate criticism, Piketty reacts by stating that the proposals are only intended to provoke debate. It could have been more parsimonious.

In Piketty's wake, from time to time, theses emerge that aim to mitigate the problem of inequality in Brazil through taxes.

The authors of these theses, in fact, overestimate the power of taxes and underestimate the imagination of tax planners, in a globalized world, with great mobility of people, companies and capital.

Taxes, at most, may have an incidental impact on inequalities, the understanding of which involves numerous other variables, such as education, health, social protection, level of economic activity, etc.

Furthermore, it is necessary to investigate the foundations of the theses, often based on clichés that result in naive (axiomatic) theories, which are essentially committed to premises and consistency, but not necessarily to reality.

A recurring cliché is the assumption that the tax systems in which consumption taxation prevails over income are regressive (unfair).

This hypothesis may be true in tax systems where consumption admits one or a few rates and the taxation of income is effectively progressive, considering its rates, calculation basis and exemptions.

Denied the premises, any assessment of the tax justice of a tax system can only be made with an analysis of the specific situation.

In Brazil, for example, consumption admits overlapping taxes (ICMS and IPI), each with very peculiar characteristics, not to mention CIDE-Combustíveis.

The ICMS that originally intended to be the second experience, at the international level, of value added tax ended up being a sui generis tax, in an identity crisis. Aside from that, it is presumed to have more than 40 effective rates.

The IPI is in no way comparable to excise taxes, generally levied on few products, such as beverages, tobacco and fuels.

There are, therefore, no reasons for, a priori, to conclude that consumption taxation in Brazil is regressive. In fact, progressive consumption taxation has long been discussed.

It is also common to include PIS and Cofins in the taxation of consumption. Such classification is an amazing eccentricity, since the basis for calculating these contributions, in the cumulative regime, is identical to that of income tax and, in the non-cumulative regime, it approximates income tax, in no way resembling the IPI or ICMS.

Strictly speaking, there has never been an assessment of tax justice in the Brazilian tax system, without clichés, let alone its repercussions on social inequities.

 

Everardo Maciel is a former Federal Revenue Secretary and ETCO Advisor