Tax Simplification Archives - Page 4 of 6

Efforts to end the fiscal war

ETCO 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 GuimarÃ £ es, said at an event held in SÃ £ 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 GuimarÃ £ 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. GuimarÃ £ 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 GuimarÃ £ 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.

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)

ETCO and Sescon announce partnership on Tax Simplification

ETCO and the Union of Accounting Services Companies (Sescon) agreed to prepare a tax simplification project. "We will work towards creating rules to make it easier to collect taxes, saving time and generating greater legal security," said ETCO's chief executive, Evandro Guimarães, at the opening of the 24th Meeting of Accounting Services Companies in the State of São Paulo held in Campos do Jordão (SP).

'I fear the tax burden will increase', says Bernard Appy

When Luiz Inácio Lula da Silva won the elections in 2002, economist Bernard Appy went to the government with a mission that time has proved to be thorny: to carry out tax reform. It implemented several measures that aired tax collection, but it left in 2009 without changing the country's major tax distortions.

Appy is now preparing to start a new phase. He is leaving LCA Consultores, a company he helped create and whose partner is Luciano Coutinho, the president of the National Bank for Economic and Social Development (BNDES).

"I'm going to provide public management consultancy, but I'm not going to the government and I'm thinking if I start a company," he says. He is also concerned with changing the tax and fiscal structure of the country. He made contributions to the presidential candidates. “Our standard of fiscal policy is a low-growth trap,” he adds.

Below are the main excerpts from the interview he gave to the State.

What reforms should the next government adopt as a priority?

For my training, certainly the tax reform and, within it, I think the ICMS (Tax on Goods and Services) is an important topic, which also involves the fiscal war. Another issue is that states still tax investment. But I have no proposals, I have principles. We have to harmonize taxation. Personally, I think you have to relieve formal work in large companies - having more large companies with formal employees is good for the country to grow; reform the PIS / Cofins (social contributions); rethink the taxation of micro and small companies. It has a reasonable agenda. It will not be possible to do it in a single government, but the objective is to make the country more efficient.

Government enters and government leaves, everyone says that tax reform is necessary, but it does not happen.

I think we are maturing. The chance of being done is much greater now. In the case of the ICMS, with regard to the tax war, there is a greater degree of maturity in the discussion that can legalize the granting of tax benefits.

Proponents of the fiscal war say it improves the distribution of companies across Brazil. Wouldn't that make this distribution difficult?

The tax benefit began to be given in the 80s by the poorest states, but it became widespread. What's the problem? Example: São Paulo provides benefits to wheat milling companies, but Rio Grande do Sul produces wheat. The milling industry should not be in São Paulo. It should be in the South. Rio Grande do Sul, in turn, provides an incentive to attract the GM automaker, which should be in São Paulo. What is the final effect? I have raw wheat leaving the South and going to São Paulo, when noodles should be leaving. And I have auto parts leaving São Paulo to the South, and a car ready to go back to São Paulo. A huge part of the incentives ends up becoming a cost of logistics, the State does not exploit its vocations and still induces the creation of an inefficient productive structure in the country. Another question: everyone asks why Brazil is expensive. There is a reason. I'm not saying that I don't have to have a regional development policy. On the contrary. The whole discussion of tax reform goes through this. If you look at international literature, you will see that the best regional development policy is to provide infrastructure for the State. If it reduced the cost of logistics it would have an automatic impact. The companies would go to the States with cheaper labor.

Mr. you already mentioned that a lot goes through Congress and causes damage that most people don't even know. Mr. have any example?

A recent example was the change in the Law of Simple. For some segments, greater benefits were defined. A lawyer who establishes himself as a Simples company and has a revenue of up to R $ 180 thousand per year, R $ 15 thousand per month, will pay 4,5% tax on his revenue. It looks good, but what's wrong with that? He will pay much less tax than a lawyer with the same income employed in a large law firm. According to the table, his rate is 27,5%. The cost of this formal employee exceeds 40% in total. They are inducing two things with this change in Simples. They lead employees to form themselves artificially as a company, what is called 'pejotização'. Is very bad. Soon there will be someone from the IRS questioning. It also induces the lawyer to leave the company and set up a small, tiny office where he works alone, often less efficiently. What happens? We created a gap between the microentrepreneur and the formal employee of a large company. And this gap prevents the small ones from growing. The joke that if Microsoft had started in Brazil it would still be in a garage fund is true. Our tax system means that whoever starts in the garage fund stays there forever.

Because of the tax?

Yes. Because of the tax difference. I am not saying that the small does not have to be less taxed. Obviously it has. But we need a harmonic system. You cannot default to billing. I'll give you an example. A restaurant is in the first strip of Simples, R $ 180 thousand per year. The owner must have an income of about 10% of this, R $ 1,5 thousand per month, maximum R $ 3 thousand. Now, I treat the owner of the restaurant like the lawyer who has the same income. But the lawyer doesn't have to buy food, pay employees like a restaurant owner. I need a system that makes a difference in terms of income and encourages companies to grow. The tax burden will increase with the growth of the company, but not making leaps.

Reduce tax burden off the radar?

Reducing the burden is not a matter of the tax structure. It is a matter of fiscal policy (a policy that defines how the government collects and spends). In the short term, I don't see how to do it. On the contrary: my fear is that in the short term we will have an increase in the tax burden to close the accounts. In the long run, it may have space again. If you want, I have another theme.

Which?

Another issue of great concern in Brazil - very much so - is the design of fiscal policy. We have a structure with enormous rigidity in spending. A civil servant cannot be fired, any number of funds are earmarked to finance this or that. What's the problem? When you have periods of growth, the revenue grows above the GDP (Gross Domestic Product), the State creates new rigid expenses and still meets the primary surplus target. When the downturn comes, revenue drops. How does it adjust? You can adjust for a time by reducing the primary surplus, as is being done now, but it has a limit. How do you break down the rigid expenses you created? You don't dismount. And how does it work? Cutting investment and raising tax burden. This cycle has been repeated in Brazil since the 1988 Constitution. Now they have decided that 75% of the pre-salt revenue goes to education and 25% to health. When the price of oil is good, I will raise more and spend more. But then the price of oil falls, revenue falls, but I have a fixed expense. How to do? It has now been decided to allocate 10% of GDP to education in the National Education Plan. You have nowhere to take this feature. There is not. It is implicit in the goal that will have an increase in the tax burden - but no one has discussed this in Brazil.

Mr. would you dismantle those obligations?

Ideally, yes, but of course you can't do it all at once. You can change the formula. Instead of saying X% of my income goes to education, I can say that I will spend the same amount as last year, adjusted for inflation, and then discuss what I will increase in the margin.

Mr. talked to any candidate about it?

Not about that.

Did you talk about other things?

I gave the candidates some suggestions for changing tax policy. Although it is very difficult to discuss this technically during the campaign. It is an arid theme. But at the beginning of next year, the chance to define something in this area is great.

Mr. Did you also discuss this tax proposal with the candidates?

No. It doesn't stand a chance in time of election. It's the opposite. People are promising more: Marina (Silva) said she will give 10% of the gross revenue for health. Aécio (Neves), who will maintain the minimum wage adjustment policy. At this time only kindness is done.

As it is, will the government have to increase the tax burden or will it be able to maintain it?

Everyone knows that a fiscal adjustment will have to be made at the beginning of the next government. It's done. Personally, I can't see how to make a short-term adjustment without increasing the tax burden. The other option, which I consider the best: credibly signal that you will have a policy of containing expenses throughout the term, so that in the end you will be in a more balanced fiscal situation.

In that case, wouldn't you need to lift the load?

Part of the adjustment process includes raising damped prices - mainly electricity and fuels. When you do, it has an effect similar to an increase in tax burden. And there is a third option, which is to deal with issues that have a structural impact on tax: social security. There is change that can be done and it has a long-term impact, it signals a sustainability that gives space to manage fiscal policy in the short term. But, if the government wants to continue spending a lot, use 10% of the revenue for health, 10% of the GDP for education, then it will have to increase the tax burden. All kindness has a price. It will be difficult for the Minister of Finance in the next government.

Source: O Estado de S.Paulo

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Projects for Tax Simplification

ETCO supports projects for reduce complexity and improve the balance of the tax system, favoring the increase of the taxpayer base and the reduction of the tax burden on companies.

REFERENCES

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.

Economic Affairs Commission to vote on solution to fiscal war on October 7

Vice-president of the Economic Affairs Commission (CAE), Senator Luiz Henrique (PMDB-SC) informed the Senate Agency that he will put to vote, on the 7th, the bill that offers a possible way out of the fiscal war (PLS 130 / 2014). According to him, the biggest obstacle to the proposal, the resistance of the governing base, seems to be overcome with a statement by President Dilma Rousseff, given this week in Santa Catarina, in favor of the vote.

Another factor that may accelerate the decision of the CAE and the Senate Plenary, said the senator, is the possibility that the Supreme Federal Court (STF) would put on the agenda, in November, the Binding Summary Proposal 69, which considers the tax incentives unconstitutional relating to ICMS granted without prior approval by the National Council for Farm Policy (Confaz).

The president of the STF Jurisprudence Commission, Minister Gilmar Mendes, spoke on September 8 for the “admissibility and convenience” of the edition of the summary. According to the magistrate, the binding entry “mirrors the peaceful and current jurisprudence” of the Court. Finally, he suggested its inclusion on the agenda of the STF Plenary.

Source: Portal Agência Senado

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Common sense solution to fiscal war

Interview with Evandro Guimarães, ETCO's executive president and published in the Sindicom magazine, comments on the legal uncertainty resulting from the fiscal war between the states.

In defense of a rational solution to the issue, Evandro states that only the National Congress is able to end the clashes, through negotiation between state representations and also draws attention to the economic and tax distortions generated in the country by the fiscal war .

Click here and check the full report published on page 11

Source: Revista Sindicom

Program that returns 30% of ISS is implemented in Vitória

Part of the tax that the taxpayer pays in parking lots, gyms, private schools or laundries, will be refunded as a deduction in the Tax on Urban Property and Territorial Property (IPTU) or by deposit in a current account. This Monday, the 1st, Note Vitória started to operate, a program that will generate a 30% credit on the value of the Tax on Services of Any Nature (ISS) for consumers who, upon receiving the Electronic Services Invoice (NFS-e) request the inclusion of your CPF.

Colleges, language courses, construction companies, appliance repair shops, beauty salons, hotels, machine shops and surveillance and cleaning companies are also among the services that will generate credits. To receive the benefit, it is necessary to register on the website www.notavitoria.com.br. However, credits linked to the CPF will be generated automatically, when the Victory Note is issued.

The minimum amount to redeem the credits will be R $ 25, but the benefit must be held by the bank account and must be regular with the Municipal Finance Department (Semfa) at the time of return. Service provision activities that are not required to issue electronic invoices, as per Ordinance 58-2013, such as health plans, tolls, lawyers, accountant, dentist, doctor, services performed by Microempreendedor Individual - MEI (company) will not generate credits. individual framed in Simples Nacional, with annual revenue of up to R $ 60 thousand), financial institutions and notaries.

Source: Portal Revista ES Brasil

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