2023-07-16 03:03:07
There is nothing to discuss: there is a consensus on the need for a Tax Reform in Brazil. But it is not possible to imagine a top-down reform without the appropriate discussions and debates.
If in concept the reform is unquestionable, in content it is full of misunderstandings and fundamental questions that remain unanswered.
We live in a Federation, where states and municipalities carry their own values, difficult to be contemplated in a reform imposed by minds who think they are enlightened, but who formulated it with their backs to the real Brazil.
We have an outdated and complex legislation. It needs to be renovated, of course. But this cannot be done in a simplistic way, treating such different federative entities in the same way.
The Tax Reform cannot take away the autonomy of states and municipalities. Transforming governors and mayors into mere expense controllers, without the capacity to plan, formulate and implement public development policies.
The current reform proposal carries an aura of backwardness as it promotes greater concentration of resources and power in the Union. It is a kind of “More Brasília, less Brazil”. As it is, it deepens regional inequalities, inhibits industrialization in the interior of the country and generates unemployment.
The IBGE Census showed that current regional development policies, even with some imperfections, have worked. Midwest, North and Northeast grow above the national average, reducing inequalities. The current reform project puts an end to this, leveling the prospects for advancement of emerging states to the bottom.
The reform project affects only 35% of the country’s taxes. Of these, 64.8% are state and municipal taxes, which were simply excluded from the discussion. As well as the agribusiness and services sectors, which did not have the opportunity to actually sit at the debate table.
The current proposal deeply hurts the service sector, which represents regarding 70% of GDP. Liberal professionals will be heavily penalized. And it will squeeze workers and the middle class even further as it burdens services such as health and education and, above all, the basic food basket. There are regions where taxation on the basic food basket can even triple in value.
Then comes the mistaken story of cashback, which is a contradiction. It makes no sense to increase taxation, charge the worker and then selectively return part of the collected tax. Unless you look under a great voter, which would be even worse.
The idea of cashback it goes once morest the grain of the simplification discourse of the project’s defenders, because it is complex, bureaucratic, subject to fraud and does not benefit either the middle class or low-income workers. O cashback encourages informality, since, to apply for it, the citizen needs to be in the CadÚnico.
Also note that the authors of the proposal do not have concrete information regarding how, for example, the State Compensation Fund, one of the pillars of the project, would work. More than once, I asked for simulations of how the Fund would work and they mightn’t explain it. In that regard, therefore, it would be a leap in the dark.
We have to think regarding Tax Reform. But it needs to be done in slices, starting with federal taxes, where the greatest weight of the Brazil Cost resides.
After that, with a lot of dialogue and with the calculations put on the table, we might move on to state and municipal taxes, taking due care not to harm economic segments. We cannot pick winners and losers. The account has to close for everyone.
Ronaldo Caiado is governor of Goiás.
Ronaldo Caiado
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