The Rome Consensus: tax reform is on the right track, ma il diavolo…

Report from the website Brazil Journal highlighted that Dr. Eduardo Maneira, partner at Maneira Advogados and professor at UFRJ, coordinated the debate on tax reform, during a seminar held in Rome, in a partnership between the Escola Superior da Advocacia, of the OAB, and the Sapienza University. The event, which took place last week, brought together several authorities and experts on the topic, such as the special secretary for Tax Reform at the Ministry of Finance Bernard Appy, and federal deputy Aguinaldo Ribeiro, rapporteur of the reform proposal in the Chamber.

The Rome Consensus: tax reform is on the right track, ma il diavolo…

Published on: 12/05/2023

Geraldo Samor

A large part of the community of lawyers and professors in the tax area gathered last week in Rome, in a debate promoted by La Sapienza University and the Escola Superior da Advocacia.

The idea of the event, coordinated by professor Eduardo Maneira, from UFRJ, was to debate and exchange experiences about taxation and the challenges of the digital era, but – as always – typically Brazilian issues took center stage.

Minister Luís Roberto Barroso, the star of the seminar, tried to convince those present that the STF decision that disregarded res judicata was not a joke.

The many STJ ministers present preferred to debate, with undisguised indignation, the decision by Minister André Mendonça last week that almost prevented them from judging the issue of subsidy taxation.

But the hottest topic was, of course, tax reform, including due to the presence of the rapporteur, deputy Aguinaldo Ribeiro, and Bernard Appy, the child's father.

From the Italian side, it was possible to understand what works well (and badly) in VAT, which has existed there for years. The issue of the single tax rate, for example, was widely debated: more than 80 countries have more than two tax rates.

In fact, for the first time the rapporteur publicly admitted that sectors such as health and education should even have a different rate. Even Appy agreed that this should happen, taking into account the political game to approve the reform.

Experts raised details of the reform that have been little debated.

Minister Ricardo Lewandowski, for example, who was in the audience, asked Appy about a possible violation of the federative pact if a single tax on consumption was adopted, replacing the ICMS and ISS.

Appy and professor Melina Rocha responded that the exercise of the federative role of subnational entities does not simply derive from the existence of a tax to call their own, but rather from effective collection. And they also brought examples of numerous developed federations that adopt this model, such as Germany, Canada and Australia.

Tax expert Luiz Gustavo Bichara spoke about the issue of legal certainty involved in the sudden extinction of tax benefits, which required concrete investments from taxpayers to be granted.

Bichara also wanted to discuss the transition: according to him, there seems to be a “dangerous” political consensus to adopt the so-called dual VAT (one for municipalities and states, the other for the Union), with only the first having a transition.

According to him, the result of this would be an increase, for those on the presumed profit regime, from 3.65% to 12% overnight.

The ‘Rome consensus’ is that reform is really urgent, and the model that is in place is good, especially when mirroring systems that work in many countries.

But since the devil is in the details – and the Leviathan State is always lurking – the taxpayer must remain attentive and vigilant.

https://braziljournal.com/o-consenso-de-roma-reforma-tributaria-esta-no-caminho-certo-ma-il-diavolo/