Eduardo Lourenço debates tax reform on Canal Rural program

The lawyer Eduardo Lourenço, partner at Maneira Advogados, was a guest on the program “Direto ao Ponto”, on Canal Rural, where he argued that tax reform should focus on not increasing the tax burden and simplifying the system.

Tax reform: simplification is good, but increased burden is worrying, says IPA

Bill and proposed amendments to the Constitution are being processed in Congress and all change federal taxes

09/26/2021

VIDEO LINK

https://www.canalrural.com.br/?video_slug=direto-ao-ponto-26-09_20210924070141

The lawyer and consultant at Instituto Pensar Agropecuária (IPA) Eduardo Lourenço argues that tax reform matters should be based on preserving the current tax burden and facilitating taxes. He participated in the program Direto ao Ponto this Saturday, 25th, which debated the topic.

“[Tax reform] It will contribute a lot to the Brazilian economy, if we have two assumptions: the maintenance of the tax burden, that is, I cannot increase taxation, and the other is simplification, I cannot bring more tax litigation.”

Currently there are at least two proposed amendments to the Constitution (PEC) and a bill (PL) that change federal taxation: PEC 110 of 2019 (in the Senate), PEC 45 of 2019 (in the Chamber of Deputies) and PL 3887 of 2020 (in the Chamber of Deputies).

The bill was sent by the federal government itself and, unlike the PECs, it changes two federal taxes, the Social Integration and Public Servant Asset Formation Program (PIS) and the Contribution for Social Security Financing (Cofins), leaving state and municipal taxes aside. According to the Executive's text, the two taxes would become just one, theContribution on Goods and Services (CBS).

However, the initial text presented by the government raises concerns for the sector, as Lourenço explains. "Today, the individual rural producer is not a PIS and Cofins taxpayer and the main inputs are either exempt or there is a significant reduction in their taxation. And, in the subsequent chain, he generates a credit for the purchaser, for the processing industry called presumed credit. He [individual rural producer] would become a CBS taxpayer according to the federal government's proposal and this is one of the main problems that we identified for the agricultural sector."

According to Lourenço, sectors such as milk could suffer significant impacts. “A very big problem of accumulation [of taxation] in the chain.”

For the IPA consultant, one of the solutions is to preserve the current format. “One of the proposed ways is to maintain the current system, which says that the individual rural producer is not a taxpayer, the inputs are exempt from taxes, and it generates a presumed credit for the acquirer, for the acquiring legal entity, the processing industries, be it dairy, be it exports of trading, be it ethanol production.”

*Under supervision of Letícia Luvison

https://www.canalrural.com.br/programas/informacao/direto-ao-ponto/reforma-tributaria-simplificacao-e-boa-mas-aumento-de-carga-concer-diz-ipa/