Guedes defends a lean version of the IR reform with a charge on the super-rich

Minister Paulo Guedes (Economy) defended, this Monday (9), the progress of a leaner IR (Income Tax) reform, reducing taxation on companies and taxing the super-rich.

After the basic text on the IR reform was approved, with modifications, by the Chamber of Deputies in September of last year, the project remains locked in the Senate. The point most criticized by senators is the one related to the collection of taxes from legal entities and taxation of profits and dividends.

“We can make a leaner version [da reforma do IR], taxing the super-rich and reducing the corporate tax. This is what Brazil needs to receive investments from abroad. Our reform would reduce taxes from 34% to 26% in a first move,” said Guedes.

The minister participated in an event to launch the investment monitor, a digital platform developed in partnership between the Ministry of Economy and the IDB (Inter-American Development Bank), with financial support from the British government. On the radar, investments of R$ 860 billion are mapped for the next ten years.

In defense of the tax reduction, Guedes also stated that the IPI (Tax on Industrialized Products) is a tax against Brazilian industry.

“We have deindustrialized Brazil in the last 30, 40 years [com o IPI]. In tax reform, it ended up, in favor of added value, converging on the OECD model. [Organização para a Cooperação e Desenvolvimento Econômico]. We want to join the OECD,” he said.

The government has announced tax cuts on the eve of the electoral calendar, at a time when President Jair Bolsonaro (PL) will seek re-election.

Guedes’ statement on the IPI comes days after Minister Alexandre de Moraes, of the Federal Supreme Court (STF), last Friday (6th) suspended an excerpt from President Bolsonaro’s decree, which expanded the rate reduction to 35%. The precautionary measure is valid only for goods that are produced in the Manaus Free Trade Zone.

At this Monday’s event, Guedes once again defended a model based on private investments, with a focus on concessions and privatizations, and, in the face of the reconfiguration of global production chains, he placed Brazil as part of the solution to challenges in the areas of food, energy and security. climate changes

According to the minister, the growth model based on public investments has run out, as “it has led to corruption in politics and stagnation of the economy.”

The Special Secretary for Productivity and Competitiveness of the Ministry of Economy, Daniella Marques, also said that the model of “induction of development by public investments proved to be flawed, wrong and resulted in 14 thousand stopped works”.

as showed the Sheet, the public sector invested, on average, around BRL 46 billion a year in infrastructure from 2018 to 2021, and the private sector, BRL 94 billion. In the previous three years, from 2016 to 2018, the average for the public sector was R$57 billion, and for the private sector, practically the same R$94 billion. That is, while public investment fell by 19%, private investment remained the same.

Regarding the environmental issue, Guedes stated that the Brazilian government is working together with the OECD so that countries that promote conservation initiatives are paid. “We need to get paid for the environmental services we provide,” he said.

In April, the Amazon had a record of deforestation: 1,012.5 km² of forest were cut down. Number is an absolute milestone in the recent history of Deter, from Inpe (National Institute for Space Research), for the month.