House vote on tax reform next week.

Posted by jrodholfo

November 13, 2008

The chairman of the committee's special tax reform, Mr Antonio Palocci (PT-SP), said it intends to vote on the proposal (Pecs 233/08, 31/07 and 45/07) next week. He said that the discussion of reform will be closed on Tuesday (18) and hopes that the report is ready to vote until Wednesday.

The rapporteur of the tax reform, Mr Sandro Mabel (PR-GO), will talk with the secretaries of State Farm to try to an agreement on the proposal. He said it will try to clarify the doubts of Secretaries and was said to change provisions of the report items that may harm a state.

The period of discussion until Tuesday, given by Palocci, is the term that the rapporteur is to make these changes. In a document sent yesterday to the committee, secretaries from 16 states asked for the postponement of the discussions of reform.

Suggestions of states
At a meeting today with the committee, the Secretaries of State Farm of four states (Sao Paulo, Piauí, Espirito Santo and Mato Grosso do Sul) presented their demands to the committee. One of the main complaints is that the new Value Added Tax (VAT-F) may increase the basis of the collection of contributions that he would replace (PIS and COFINS).

The secretaries fear that the current wording of the tax reform allows the collection of VAT on goods and services which today are based on calculation of the ICMS and the ISS, state and municipal tax.

Mabel argued that VAT should not exceeding their base because there will be a collection of locks. For the text, that tax can not collect more than that charged by the contributions he replaced. "The natural is that it decreases as they raise a larger base, with more taxpayers coming to the legality," he said.

War tax
The Secretary of Finance of São Paulo, Mauro Ricardo Machado Costa, was concerned about the validation given by the war tax reform (tax incentives granted illegally by states to attract businesses). The proposal under discussion provides that, to cancel such an incentive, we will need approval by a majority of members of the Board Finance (Confaz), with votes of representatives from all regions of the country

For Costa, it's easy to states in a region close protection to the incentives of each other. "All the irregularities committed in the past will be validated and, worse, will continue doing this," he concluded.

Mabel disagreed and the Secretary said that the proposal will end the war tax. According to him, the reform will penalize the state or municipality that insist on the war tax. These states will lose transfer of the Union, even the present, in addition to funds that are being created.

Sandro Mabel said that reform does not validate the incentives, but it needs to guarantee the investment made by companies. "If the state signed the benefit, it may be illegal, but the company has installed and made investments there, entrusted, and not remain in this uncertainty," he said.