With the change of government in 2023 and a new president, the topic of Tax Reform has returned to the spotlight. According to tax law specialist João Paulo Lyra - from the law firm Pagotto Rizzato e Lyra Sociedade de Advogados - this issue has been dragging on for many years and across different administrations, and there is an urgent need for changes.
"Tax Reform is nothing more than a proposal to simplify the tax system and eliminate some taxes, unifying others; however, since it is a topic that involves various sectors of Brazilian social systems, there are controversies," says the lawyer.
Currently, two proposals are being processed in the Federal Senate, PEC 45/2019 and PEC 110/2019. Both proposals have a common goal: to eliminate a series of taxes, transforming them into two: the Tax on Goods and Services (IBS) and the Selective Tax.
"Since these are taxes that apply to goods and services, companies, and federative states, there is much discussion about the timeline for changes, rates, and that is why the topic is filled with impasses," says Lyra.
There is also a debate about the refund of taxes to low-income individuals, called 'tax cashback', where taxes paid by this segment of the population would be refunded. "The government's economic team is studying the use of citizens registered in the Cadastro Único to define who the beneficiaries will be," explains the lawyer.
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