CEBDS (Brazilian Business Council for Sustainable Development) has joined the national campaign “Sign Up Brazil”, an initiative of the Efficient Brazil Movement for tax simplification associated with the gradual reduction of the tax burden and increased efficiency in the management of public spending. The objective is to offer Brazilian society a clear set of actions capable of driving economic growth to an average of 6% per year over the next 10 years and sustainable job creation.
For this level of economic growth to become a reality, the Movement estimates that it will need to gather more than 1.5 million signatures on the document “Sign Up Brazil”. Even before the launch of the national campaign, the MBE had already registered more than 115 thousand signatures.
The “Assina Brasil” program, which now has the support of CEBDS, has also officially joined the state governments of Santa Catarina, Pernambuco, São Paulo and Minas Gerais, and final arrangements are underway for the membership of eight more states. At the same time, the tax simplification project has already been delivered to the Minister of Finance, the presidents of the Senate and the Chamber of Deputies and their respective support bases.
What is the tax simplification model?
It is possible to make the Brazilian economy grow at an average rate of 6% per year, over the next ten years, as long as tax collection is simplified and the tax burden is considerably reduced, no longer exceeding the level of 30% of Brazilian GDP.
The proposal is a gradual process. Initially, several taxes would be unified, without altering the current volume of revenue collected by the Union, states and municipalities, nor changing the distribution of revenues among the federative entities. In practice, the IPI and federal contributions (PIS, Cofins, CPP and Cide) would be consolidated into a single tax, and 27 state ICMS would be converted into a single legislation with harmonized rates, the Federative ICMS.
In the next stage, after a period of adaptation to the simplified model, a true virtuous circle would begin: on the one hand, more efficient tax collection would increase the revenue of the federative entities, on the other hand, it would offer greater transparency to citizens and there would be significant bureaucratic savings in the time spent on tax obligations by companies. The expansion of investments would be unlocked. The country would return to rapid growth, but now with a relatively lower tax burden, as the GDP continues to expand.
This new, simpler, more efficient and competitive Brazil, proposed by the MBE, can be achieved through the approval of a single Constitutional Amendment and a Draft Bill, the latter to regulate the Fiscal Management Council (provided for in article 67 of the Fiscal Responsibility Law).
The six simplifying measures:
• Unify the interstate ICMS rates at a midpoint between 7% and 12% and then gradually reduce them to the level of 4%.
• Unify federal circulating taxes – PIS, Cofins, IPI, Employer Social Security Contribution and Cide – into a single national social tax, shared by the federative entities.
• Create a Fiscal URV for the Union, states and municipalities, respectively, in order to guarantee the neutral and equidistant distribution of all circulating revenues from the day of the reform.
• Determine a date for the birth of the Shared National ICMS, the result of the unification of the new national social tax and the new unified ICMS. Therefore, a single tax in economic circulation.
• Comply with article 67 of the Fiscal Responsibility Law, approving the organization of the Fiscal Management Council, which will coordinate the path of the new simplified tax system.
• Gradually reduce the tax burden to the target of 30% of Brazilian GDP in 2022, through the Fiscal Management Council.
Visit the website (http://www.assinabrasil.org) and also leave your digital signature for Assina Brasil.
