States and municipalities demand rejection of substitute for IR reform

| Photo: Marcelo Andrade / Gazeta do Povo / Arquivo

Representatives of states and municipalities spoke out against the proposal of the rapporteur of the income tax reform project, Celso Sabino (PSDB-PA), which modified the government’s text. A preliminary report by the deputy, presented on Monday (12) after an agreement with the Ministry of the Economy, provides for a tax reduction for legal persons of 12.5 percentage points in two years.

Added to other measures, such as maintaining the tax exemption on real estate investment funds, it is expected that the changes suggested by the congressman will generate a net reduction in collection of R $ 26.9 billion. in 2022 and 30 billion reais in 2023, according to the calculations of the deputy himself.

In an open letter published Thursday (15), the National Committee of State and Federal District Secretaries of Finances (Comsefaz) calls for the “total rejection” of the deputy. According to the entity, the rapporteur’s changes will result in losses of around R $ 27.4 billion in transfers from the State Participation Fund (FPE) and municipalities (FPM), “significantly compromising the procurement and supply essential services to the population ”.

The secretaries affirm that there is “ignorance of the existence of a federative pact in the Constitution of the country, taking into account the blatant attack against it”, proposing that more than 95% of the fiscal impact be supported by sub-national entities.

“The report attacks the budgetary balance of the Union, States and municipalities, which have struggled to regularize their accounts since the 2015 crisis and which was worsened by the pandemic which began last year,” without a concrete horizon of outcome ”, specifies the document. , signed by the president of Comsefaz, Rafael Tajra Fonteles, secretary of Finances of Piauí.

For him, if the government intends to reduce the tax burden, it should face taxation on consumption and not on income, “as currently recommended by studies and international organizations”.

“We postulate the total rejection of the substitute to guarantee the Brazilian population dignity and public services in accordance with the expression of the democratic will that has led us to the current management of subnational public administrations”, concludes the letter.

The results of the reform of the IR are “scandalous”, considers the Confederation of municipalities

In a public note, the National Confederation of Municipalities (CNM) also calls “on parliamentarians attached to municipalism and tax justice to disapprove the text”.

CNM president Paulo Ziulkoski, former mayor of Mariana Pimentel (RS), calls the report a “scandal”, “as much because it relieves the incomes of the companies and the richest people,” at a time when the world is trying to move in the opposite direction, how much to produce a hole of at least 30 billion reais in the public accounts ”. The entity estimates that, of this amount, municipalities will suffer losses of R $ 13.1 billion.

According to the calculations of the CNM, the halving of the corporate tax rate (IRPJ) will result in a loss of 24.5 billion reais for the municipalities, which will not be properly offset by the taxation of dividends.

“The CNM, although agreeing with the fair correction of the income tax table for individuals, with the return of taxation on dividends and even with the moderate reduction in the tax burden of companies , expresses itself against the report as presented ”, specifies the note.

“If the National Congress wants to reduce the country’s tax burden, it should preferentially reduce the social contribution on net income (CSLL) of companies and consumption taxes, which are very high in Brazil. But do not favor a degradation of income from RI, which is so important to reduce income inequalities in society and in the federation, through State and municipal participation funds, ”he concludes.

Although he presented the preliminary report to House party leaders and to House Speaker Arthur Lira (PP-AL), Sabino has not yet tabled the document in the legislative proposal system. The text can still be modified by amendments from other parliamentarians. The House plenary vote should take place in August, after the legislative recess, before the text is sent to the Senate.

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