Valor Econômico spoke to our partner Ana Cláudia Utumi about the changes made to the tax reform text in the House, after the bill was approved in the Senate.
Ana clarifies that not all the changes made by the Senate to the Selective Tax (IS) were withdrawn by the House. With fewer benefits, she says, the standard rate should be lower, but the question is whether the changes were sufficient.
She warns that “there is another issue that impacts this standard rate, which is government spending, which is constantly growing. The final rate will be set in 2032. So, as much as changes have been made now and as much as we want to put a brake on the law, we can’t guarantee a fixed rate with the growth in public spending and with the idea that revenue won’t be reduced. It’s not just the growth in spending itself, but the fact that there are now states that can’t pay all their bills,” says Ana.
For her, the adjustment should come from a review of spending. “But this review is usually modest and we are already seeing the chaos that has been the rise in the dollar in recent days.” An adjustment, she says, could also come from a review of tax benefits. “But over the years we’ve seen how difficult it is to change tax benefits. Revoking benefits is a very complicated game of forces.” The most likely route, therefore, she says, would be to change the tax rate.
