Rombo may be bigger than expected in the repair

Rombo may be bigger than expected in the repair

income tax reformIncome taxPosted by Government to Congress, at the end of June, According to the assessment of most experts, he was pointing in the right direction, but he had problems with calibration. a Submit a replacement this Tuesday (13), by the Chamber’s rapporteur of the bill, MP Celso Sabino (PSDB-PA) for Specialists, was an amendment that came out worse than the sonnet.

If the original project is accused Increase the tax burden, exhausting the richest of the richest, Sabino’s alternative is under fire for cutting R$30 billion annually in federal tax collection and falling too far in high-income taxes. In just over ten business days, the alternative turned the bill upside down. The reform goes against the recommendations of international organizations, by releasing the super-rich — not overburdening them,” wrote economist Sergio Gobetti, a respected expert on tax issues, on his Twitter account. for the poor.”

In the summary by economist Manuel Perez, coordinator of the Fiscal Policy Monitor, affiliated with the Ibre-FGV (Brazilian Institute of Economics, affiliated with the Getúlio Vargas Foundation), what is expected of income tax reform is that it taxes the richest. It improves the situation and helps finance social programs for the poor. In this line, bill 2337/2021 was designed with the support of technicians from the Federal Revenue.

With one eye on the real need to increase public spending, the other perhaps aiming to help plan the president’s re-election Jair BolsonaroThe project is stamped by the minister Paulo Geddes, erred in the specified tax levels. He weighed in on both exemptions for low incomes and incomes at the top of the tax pyramid, and was shy about launching companies.

See also  123 miles: Consumer gets money back on tickets and packages on hold, lawyers say | Travel and Tourism

The excesses gave rise to doubts about the real increase in the tax burden included in the project. Under pressure, the Internal Revenue Service has provided new estimates for the increase in the burden, which now stands at R$6 billion in three years. But it left doubts that the sting might be greater, prompting strong disapproval from leaders and business entities. In response to a question from the business, Guedes went so far as to state that he was “cheated” by Revenue.

Also with the Guedes seal, under pressure to work, Sabino’s deputy has indicted corporations for a tax break and relief for high income taxes. This resulted in a significant reduction in revenue – worth R$115 billion annually, in the accounts of the Special Rapporteur. The compensation, also found in Sabino’s accounts, amounted to R$85 billion annually, resulting in the announcement of a R$30 billion hole.

The big problem is that this amount of lost resources may be far from a real reduction in tax revenue. This is because, to reach this gap, the rapporteur has added future and unsecured returns.

Sabino, for example, is an income derived from the growth of the economy. It’s true that tax revenue depends on the course of the economy – and, let’s not forget, on the pace of inflation. But who guarantees?

Although the expansion of activity, in 2021, may advance by about 6%, this progress represents only a cyclical recovery, arising from the economic downturn caused by the epidemic. So much so that, as early as 2022, expectations were to grow at a pace that is, at best, half what is projected for this year.

See also  More countries express support for increasing IMF financing without changing contribution Economy

Tax revenue is already booming in 2021. The boost comes from a lower baseline for 2020, increased exports of goods, driven by booming international demand, and accelerating inflation.

For 2022, well-known forecasts point to a completely different picture, with a higher basis for comparison, uncertainties about the duration of strong commodity demand and lower inflationary pressure. Only recurring revenue, that is, those that are structural and more permanent, should be taken into account when calculating compensation for exemptions.

When calculating compensation for the reduction in tax collection, Sabino also relies on the elimination of subsidies for certain sectors. Again, who can guarantee that it will in fact be confirmed and not maintained or replaced by other subsidies?

All things considered, the revenue cut could end up much higher than expected in Rep. Celso Sabino’s replacement, which Guedes endorsed. With the fragile state of public accounts and the need to confront poverty and hunger, which began to grow in the country, and which were exacerbated by the epidemic, it is dangerous at least to carry out a reform that will lead to huge losses of revenue.

You May Also Like

About the Author: Camelia Kirk

"Friendly zombie guru. Avid pop culture scholar. Freelance travel geek. Wannabe troublemaker. Coffee specialist."

Leave a Reply

Your email address will not be published. Required fields are marked *