Introduction to Tax Reform
The Brazilian tax reform is considered one of the most impactful in decades, aiming to simplify consumption taxation while promoting equity and economic modernization. Through Constitutional Amendment No. 132/2023, the Goods and Services Tax (IBS) and the Social Contribution on Goods and Services (CBS) were created, replacing complex taxes such as ICMS and ISS, alongside the Selective Tax (IS), focused on products harmful to health or the environment.
Approval in the House: Key Changes in the Bill
The House of Representatives approved PLP 68/2024, which returned from the Senate with amendments and now awaits presidential sanction. This milestone represents the final step in regulating the tax reform.
Changes in the Original Bill
Among the main modifications proposed by the Senate and analyzed by the House are:
1. Introduction of New Tax Benefits:
A refund of 100% of CBS and 20% of IBS on utility bills, such as electricity, water, gas, and telecommunications, for low-income families.
A 60% reduction in tax rates for medications not listed as exempt and unprocessed products.
Creation of the “nano-entrepreneur” category, exempt from taxes, provided their annual revenue does not exceed R$ 40,500.
2. Adjustments to Controversial Items:
Retention of the Selective Tax on sugary beverages.
Exclusion of firearms and ammunition from the Selective Tax, ensuring a lower tax burden than the current one.
3. National Food Basket (CBNA):
Expanded to include items such as special dietary formulas and yerba mate, while products like soybean oil receive reduced tax rates.
4. Rules for Cashback and Differentiated Taxation:
The tax refund mechanism (cashback) will be valid starting in 2027 for CBS and 2029 for IBS, benefiting low-income families registered in CadÚnico.
Impacts on the Real Estate Sector and Regional Competitiveness
To minimize impacts on the real estate sector, taxes on rents will be reduced by 70% and applied only at the time of payment.
The Manaus Free Trade Zone and Free Trade Areas received competitive guarantees, such as presumed credits and an extended validity period until 2073.
Economic and Operational Impact
The rapporteur in the House, Deputy Reginaldo Lopes, highlighted the 0.7% reduction in the tax burden for the population as a move towards fiscal justice. However, operational adjustments, such as the creation of a steering committee to monitor implementation until 2025, will be crucial for adapting to the new model, whose full implementation is planned for 2033.
Next Steps
With approval in the House, the bill now moves to presidential sanction. Expectations are high that the tax simplification mechanisms will reduce informality and tax evasion, boosting economic growth. However, issues such as franchise taxation and payroll tax exemptions remain open for future regulations.
Conclusion
The approval of PLP 68/2024 in the House marks a historic milestone, consolidating the first phase of Brazil’s tax reform. Although challenges remain, the text establishes a solid foundation for a simpler and fairer tax system, benefiting both citizens and the national economy.