Tax reform in the Chamber should follow the path of Social Security to speed up the process

The working group in the Chamber that will debate the tax reform must have a Senate rapporteur, as happened in the Social Security reform. The idea is to speed up the processing of the text by counting, from the beginning of the discussions, with the evaluation of the neighboring House.

The presidents of the Chamber, Arthur Lira (PP-AL), and of the Senate, Rodrigo Pacheco (PSD-MG), must meet to discuss the details of the rite. The Alagoan has already signaled willingness to take the text to plenary between 60 and 90 days.

In the Social Security reform, the rapporteur in the Senate, Tasso Jereissati (PSDB-CE), and other senators participated in the discussions on the text in the special committee of the Chamber and made suggestions. Presented in February 2019, the PEC (Proposed Amendment to the Constitution) that changed the retirement rules was enacted in November, less than nine months later.

However, even with the participation of senators in the House group, the Senate still approved changes to the proposal that had already been endorsed by the deputies.

Chosen to be the rapporteur for the tax reform in the working group, deputy Aguinaldo Ribeiro (PP-PB) is already familiar with the discussion. He was appointed by the then mayor, Rodrigo Maia (RJ), to give an opinion on PEC 45, authored by the president of the MDB —deputy Baleia Rossi (SP)— and who was mentored by the current extraordinary secretary of reform tax at the Ministry of Finance, Bernard Appy.

PEC 45 replaces five current taxes (PIS, Cofins, IPI, ICMS and ISS) with a Tax on Goods and Services (IBS).

The final format of the text must also include aspects of PEC 110, of the Federal Senate. It also proposes the merger of taxes, but one of the main differences in relation to the 45 is that there are two taxes resulting from the mergers and not one.

In 110, the federal PIS and Cofins would be unified in a new tribute; and ICMS (state) and ISS (municipal) in another.

In the Senate, the tax reform was reported by Roberto Rocha (PTB-MA), whose mandate ended in January. Therefore, it is up to Pacheco to choose a new representative of the House to make the dialogue with the Chamber on the subject.

Lira wants to try to install the Chamber’s working group next week. But she still needs to align with Ribeiro and Pacheco what the size of the collegiate will be and how the rule for distributing positions by party will be.

Tax reform was chosen as one of the priorities of President Luiz Inácio Lula da Silva (PT) in the first semester in Congress. It is likely that this will be the first PEC of interest to the Planalto Palace to be voted on by the Legislature.

In other words, it will be Lula’s main battle this semester. A PEC needs the endorsement of 308 of the 513 deputies, and 49 of the 81 senators.

Government and Congress will have to untie some knots in the working group. Some parliamentarians show special concern with the Manaus Free Trade Zone. They fear that the area will lose benefits and, with it, attractiveness in relation to other regions of the country.

At lunch with the RenovaBr group, a private entity dedicated to preparing people to run for elective office, on Wednesday (8), Appy told participants that the intention is to maintain employment and income – which opened a gap for the interpretation that the Free Zone may have changes.

Parliamentarians and the government itself assess that the text of the tax reform should be dehydrated, amid sectoral pressures. The effort to approve the change in consumption taxation also seeks to pave the way for the later stage, which is the discussion of income.