The report of the complementary bill that regulates the tax reform was read, this Tuesday (10), at the Constitution and Justice Committee (CCJ) of the Senate. The text presented this Monday (9) has a series of changes that, together, cause an impact of 0.13 percentage points on the standard rate of Value Added Tax (VAT).
According to the Ministry of Finance, the standard tax rate VAT for goods and services must be between 25.45% and 27%lower than the approximately 34% currently charged on consumption in Brazil.
A request for review postponed the vote until this Wednesday (11). If approved by the CCJ, the text will be analyzed by the House plenary on the same day. If approved by the Senate, the tax reform regulation returns to the Chamber of Deputies due to changes in the text already approved by the deputies.
The project’s rapporteur in the Senate, senator Eduardo Braga (MDB-AM), explained that he sought to achieve social tax justice with the changes, and justified that the impact of the changes is small and should be compensated by other measures.
“All the changes we make represent 0.13 percentage points in the global tax rate. And I am effectively convinced that, with the level of legal security, technology split paymentcombating tax evasion as a consequence and expanding the payment base, we will have, in the end, a drop in the standard rate”, said the rapporteur.
THE split payment It is a technological tool foreseen in the reform to facilitate the payment and collection of taxes. The rapporteur argued that there is still no way to measure the gain in revenue from the changes, but that in 2026 the numbers will be evident.
Among the changes that impacted the rate is the inclusion of diapers among items with 60% lower tax for low-income families; the increase in the exemption for property transactions and the inclusion of internet and telephone services among those entitled to cashback. Cashback is the partial or total refund of the tax paid, a mechanism valid only for low-income families registered with CadÚnico.
Debate
Despite the opposition having highlighted points that need to be improved, the report was praised by senators.
Senator Izalci Lucas (PL-DF) criticized the speed with which the issue will be analyzed at the CCJ. “It is important that this project goes to CAE [Comissão de Assuntos Econômicos]. How are we going to analyze in 24 hours a matter with 2 thousand amendments, 600 amendments accepted, and a 586-page report? That doesn’t make sense. There are still some issues that can be analyzed and perhaps accepted in the report with the arguments we have”, pondered Izalci.
In contrast, rapporteur Eduardo Braga justified that there is still the Senate plenary to propose changes to the text.
The government leader in the Senate, Jacques Wagner (PT-BA), praised the rapporteur’s work on such a complex topic. “There are hundreds, dozens, thousands of interests, which are not necessarily controversial, but finding the balance point between all these interests is not easy. Surely, some will congratulate you and others will have their noses turned up. It’s the rule, no one makes an omelet without breaking eggs”, said the government leader.
Changes
The reform rapporteur in the Senate made a series of changes to the text that arrived from the Chamber, including, for example, the firearms among the products that will have to pay the Selective Taxcreated to charge some consumer goods a higher tax burden for the damage they cause to health and the environment. He also maintained the exemption for 22 basic food basket products, including meats and cheeses. The opinion, however, removed corn oil from the exemption and specified that the product will have a rate reduced to 40% of future VAT.
Another change in the text was the inclusion of diapers among hygiene products with a tax rate reduced by 60% for low-income families. Other cleaning and hygiene products consumed mostly by the low-income population were already at a reduced rate, such as bleach, toilet paper and bar soap.
The rapporteur also changed the form of exemption for medicines. In the Chamber’s text, there was a list of medicines that should be exempt, but the senator replaced the list with groups of diseases, including oncological treatments; sexually transmitted diseases; AIDS; rare and neglected diseases.
The report also brings changes to exempt app drivers from VAT chargesin addition to creating exemption bands for rentals, increasing the VAT discount for rental operations to 70%. The Chamber’s text provided for a 60% discount.
