Brasilia (EFE).- The Brazilian Chamber of Deputies approved this Thursday, in the first of two necessary votes in plenary, the tax reform proposed by the Government of Luiz Inácio Lula da Silva, which is one of the priorities of the Executive and It simplifies the country’s complex tax system.
The Government’s proposal was approved at the end of the night of this Thursday in the plenary session of the Lower House by 382 votes in favor, 118 against and 3 abstentions, for which reason it far exceeded the minimum of 308 votes that it needed to advance. because it is a proposed constitutional amendment.
What’s next for the tax?
The project has to be supported again by the deputies in the plenary before it can be sent to the Senate, where it will also need to be approved in two votes with the support of three fifths of the legislators.
The initiative even had the support of the majority of the parliamentarians of the Liberal Party (PL), the formation headed by former President Jair Bolsonaro, despite the fact that the far-right leader had asked his co-religionists to reject it.
The reform completely alters the complex tax model adopted by Brazil in the 1960s with the aim of simplifying the system, unifying various overlapping taxes charged by national, regional and municipal administrations, and reducing tax evasion.
Chamber reviewing the tax for decades
The tax reform has been discussed for several decades and all the administrations since Fernando Henrique Cardoso’s (1999-2002) tried to promote it, but did not get enough votes in Congress.
The project, which has the full support of the majority of employers’ associations and the main business entities, creates the Value Added Tax (VAT) to unify the five taxes that are currently charged on consumption.
The new tax unifies two of the three taxes collected by the national administration (IPI, PIS and Confins), one of the responsibility of the regional governments (ICMS) and another destined to finance the mayors’ offices (ISS).
The tax will be collected by the federal government and a part of the collection will be distributed to the regions and municipalities through a special fund.
The project also exempts from taxes the products of the family basket.
The reform also creates a “selective” tax on the production, sale, and importation of products considered harmful to health and the environment, such as tobacco, alcohol, soft drinks, and pesticides.
According to the Ministry of Finance, the reform can boost additional growth for GDP of 12% in 15 years because it will reduce costs for companies.
The president of the Chamber of Deputies, the centrist Arthur Lira, was one of the main defenders of the reform and asked legislators to treat it as a matter of interest to the State and not harm it due to partisan differences.
“Let’s leave the ballot box aside. The reform is not a political toy or a government agenda. the tax reform is a State agenda”, affirmed the president of the deputies shortly before opening the vote and in the middle of a great ovation.