The Esfera Forum, held last weekend in Guarujá, brought together legislators, governors, representatives of the federal government and taxpayers for an intense debate on the possible tax reform and the one that each sector idealizes, according to their interests.
Speaking for taxpayers, attorney Luiz Gustavo Bichara highlighted positive aspects of the reform, such as reducing the complexity and litigation of the current system. But he warned of the risk of a “witch hunt” if the Senate removes sectors from the reduced tax rate provision, arguing that this necessarily generates a higher overall tax rate. “These sectors may have social, economic or strategic importance that justifies differentiated treatment, as is the case with electricity and urban cleaning.”
Bichara highlighted that “the Union also has other instruments that can serve to increase the tax burden, such as the Selective Tax, whose wording is very broad”, which, for the lawyer, deserves to be subject to restrictions in the body of the Proposed Constitutional Amendment.
And he concluded by talking about concerns about the acquisition of fixed assets, “whose exemption rules should be clearer and with the need for a more gradual transition also for the federal portion that, today, increases all at once at the turn of 2026 to 2027”.
Senator Eduardo Braga, rapporteur of the tax reform in the Senate, reported that, as soon as the consideration in the house began, the matter was already the target of 80 amendments. See the transcript of the senator's presentation:
The Chamber of Deputies took a very important step. But the Brazilian system is bicameral. Just a little while ago, the presenter said: “Look, we have already taken an important step — we approved the text of the constitutional reform.” In fact, we approved the text in the Chamber of Deputies, and here are some of our most important colleagues who were responsible — I would like to congratulate the Chamber of Deputies for this important step, both in the person of the president, Arthur Lira, but also in the person of Aguinaldo Ribeiro, the rapporteur of the matter in the Chamber of Deputies, and the leader of my party, Isnaldo Bulhões, who participated just a little while ago. And in the person of Isnaldo, I would like to congratulate all the leaders of the Chamber of Deputies.
But this matter has not yet been approved. It has now come to the Senate, and in the Senate it will undergo a broad debate. And what methodology did we adopt when it reached the Senate?
The first of all measures was, upon receiving the text that came from the Chamber, to seek out the Ministry of Finance, Minister [Fernando] Haddad, the Extraordinary Secretary [Bernard] Appy, and ask for a study that could indicate the rates that would be established by the model approved by the Chamber of Deputies.
Why is that? Because I don't believe that Brazil can approve a tax reform in the dark, without having a perspective on what tax rate we are talking about for the consumer and for the Brazilian productive sector.
The second step we took, and here I would like to thank President Bruno Dantas of the Federal Court of Auditors, was to go to the Federal Court of Auditors and ask the Federal Court of Auditors for support and assistance from the Federal Court of Auditors, from a technical standpoint, so that we can have a technical basis for the information and technical analysis of the studies presented by the Ministry of Finance. Why? So that we can have technical security to vote and deliberate in an absolutely conscious manner, in the Senate of the Republic, on what we are approving for the taxpayer, for the productive sector and for the Brazilian nation in relation to the future tax burden of the reform that we intend to deliver.
I think the discussion is not just about tax rates. I was unable to conclude my reasoning in my first participation. The most important thing for the Brazilian people is that the tax burden in this reform is not increased. No one can stand paying more consumption tax in this country.
Regardless of the tax rate. For this, the limiting power to tax, which is a constitutional power, needs to be established in this constitutional amendment.
Therefore, we are asking the Federal Court of Auditors, together with the Ministry of Finance, to inform us, in the Committee on Constitution and Justice and in the Senate, what the current tax burden on consumption in Brazil is. So that this can be the limiting factor for the power of taxation as a constitutional command. Because then we will be assuring the Brazilian taxpayer, the businessman, the citizen, Mrs. Maria, Mr. João, that this tax reform will not represent an increase in the tax burden for the Brazilian people.
And then we will discuss the federative issues: the Federative Council will be a technical-administrative body, period. There is no political space in the Senate of the Republic for this Federative Council to have other functions. Otherwise, there are countless amendments — and here are Senator Efraim, Senator Angelo Coronel, Senator Hiran — countless amendments, including radical proposals to even extinguish the Federative Council — which makes the methodology approved by the Chamber unfeasible.
Therefore, unlike what was said a short while ago, the powers of the Federative Council will be under constitutional command. Clearly. Why? Because the federative issue is a matter of the federative pact that is in the Constitution of the Republic and will be preserved as such.
Now, the technical federative issues, as is the case with Simples Nacional, will be competently established by the Federative Council. Therefore, this is the main concern of the governors, which will be, in my opinion, absolutely clarified in this thematic session next Tuesday.
But here it is important to highlight the importance of the Federal Court of Auditors, as an auxiliary body of the Legislature, to resolve exactly this type of doubt, so that information that leads to a dubious interpretation is not passed on to society — the Federal Court of Auditors will validate this data in an indisputable manner for the Senate of the Republic.
Now, this is the security that the Senate wants, precisely to give the Brazilian people transparency about what we are voting on in the tax reform. This is the security that we want.
Our efforts and commitment are in this direction. Of course, in a democracy, it depends on a set of efforts and a set of events, but our schedule is in this direction. I would also like to address the issue of selective taxation.
Look, Bichara said: “Look, the Selective Tax will replace the IPI.” Now, do you want something more generic than a tax on industrialized products? What is a tax on industrialized products? Angelo Coronel, a broom is an industrialized product. Or is it not? Yes, it is. Therefore, when the IPI was instituted, replacing the consumption tax, it was also something generic.
Now, what do I think? I think that the Selective Tax, like the IPI — which has a constitutional limit, a constitutional rate ceiling — cannot be left without a constitutional restraint. And it is necessary to understand that, in the regulation of the Selective Tax, two questions arise: What is the Selective Tax — because fundamentalism cannot be present in the Selective Tax. It has to be a sustainability tax, under penalty of making the Brazilian economy unviable — now, it is an extra-fiscal tax, it is replacing the IPI — and the IPI is a fundamental basis for funding for the FPM (Municipal Participation Fund), for the FPE (State Participation Fund), for the FNO (Constitutional Fund of the North), for the FNE (Constitutional Fund of the Northeast), for the FNCO (Constitutional Fund of the Center-West), and even for funding for the BNDES.
Therefore, this tax will have — and we are discussing this with the Ministry of Finance, with Secretary Bernard Appy, because we need to calibrate this tax, and this tax has been the subject of discussion, including in relation to the issue of taxation on the final product, or on inputs, which is also a discussion that is very present in this debate.
Therefore, without a doubt, the selective tax is an important tax in the structure that was put in place, but these observations need to be taken into account, and we in the Senate are attentive to these issues and discussing technically — and obviously, with political and federative emphasis, the issue of the selective tax.
Source: https://www.conjur.com.br/2023-ago-28/relator-explica-construcao-reforma-tributaria-senado-debate