Private sector representatives express concern about tax reform

Private sector representatives express concern about tax reform

Supermarkets and farmers criticize tax increases on animal protein

Taísa Medeiros from CNN

Brasília

After the working group that discusses the regulation of tax reform in the Chamber of Deputies presented suggestions to the project sent by the government, the reaction expressed by sectors was one of concern. The final text was presented this Thursday (4).

On the side of the discussion about whether or not to exempt animal protein in the basic food basket is the supermarket sector, which claims that the tax rate reduced by 60%, as stated in the text presented by parliamentarians, will end making it more expensive these foods.

"What ended up being proposed today is a clear increase in taxes on proteins. Is that why we carried out a reform? To increase taxes for the Brazilian population? It doesn't make any sense. The speech is this, that adding proteins will increase [the value] of meat. There is no such increase, there are no such taxes as it is today", argues João Galassi, president of the Brazilian Association of Supermarkets (Abras).

For lawyer Eduardo Lourenço, who represents the agricultural sector, the bill will be higher for Brazilian consumers.

“Today we have reduced taxation on some items, which with the tax reform, with a 60% reduction, with a rate close to 11%, will greatly increase the cost of meat and animal proteins”, he explains.

Lourenço believes that burdening other items to compensate for the zero rate on animal protein is a “good and fair” calculation. For him, the negotiation continues. “Because otherwise we will export meat with a zero tax rate, with immunity, but when Brazilians consume it here, they will pay 11%.”

SELECTIVE TAX

Among the changes made by the deputies is the inclusion of online sports betting, the so-called bets, and cars electrical items on the list of items taxed by the Selective Tax (IS).

Also known as the “sin tax”, the IS will be applied to products considered harmful to health and the environment and the rate has yet to be defined.

Within the scope of sports betting, fantasy sports were included. These are online sports (e-sports), in which the player acts as if he were the coach of a team, choosing the players who will compete in the match.

A fee is charged to the participant to enter the competition, as well as a prize at the end. The sector defends differentiation in relation to bets.

"The reform worries the sector precisely because of this confusion of concepts. There is an undue comparison between fantasy and sports betting. I think this confusion is what generated this overtaxation for the sector, which could be devastating for the activity. We were caught by surprise", says Rafael Marcondes, president of the Brazilian Fantasy Sports Association.

"There were several conversations, mainly with the Treasury and it seemed that this problem had been resolved. In addition to remaining equivalent to a sports bet, fantasy activity was also burdened by the Selective Tax, as if it caused impacts on health and the environment, which doesn't make any sense", he argues.

Also included in the extra taxation of the Selective Tax is mineral extraction. The change displeased the sector, which expressed concern about Brazil's competitiveness in oil exports.

"The impact will be stronger on the perception that investors will have of the country, the business environment. In other words, what we see is the complexity with the creation of a new tax and the lack of legal certainty in relation to the Brazilian tax system. We will at least suggest the non-incidence on exports for the new report", says Daniel Antunes, executive manager of Government Relations at the Brazilian Institute of Petroleum and Gas (IBP).

PROCESSING

Members of the working group told the reporter that a new report should be presented next week, with the vote on urgency next Tuesday (9).

The expectation put forward by the president of the Chamber of Deputies, Arthur Lira (PP-AL) remains: that the vote will take place even before the parliamentary recess, which begins on July 18.

However, in the opinion of the parliamentarians interviewed, if the exemption on animal protein is not included in the text, it will be unlikely to be approved in the Chamber.

At the same time, negotiations will need to be carried out side by side with the Agricultural Parliamentary Front (FPA), which has a large number of votes, necessary for the report as a whole to be approved.

Deputy Joaquim Passarinho (PL-PA), president of the Parliamentary Entrepreneurship Front and member of the GT, criticized the text that had been sent by the government to Congress.

"The selective tax cannot be a revenue tax. But when you say that it is a tax to inhibit consumption. How can I inhibit collection, for example? For me it is not a logical calculation. Why do you tax soda and not tax sugary drinks? Because soft drinks sell a lot. This shows that the government is using it as a revenue tax", he argued.

He advocates finding the “middle ground” to advance regulation.

"Everyone wants to see their sector benefit at this moment. But we have to think that it is a change of mentality. Everyone needs to pay attention, even the sectors that were covered. You can't sleep, because the text can still change", he warned.