The vote on Tax Reform may take place in the Chamber of Deputies by the end of this week. Understand how it works and the voting schedule!
Tax Reform has been the subject of debate for years in Brazil, but there is a real expectation of approval in 2023. President Luiz Inácio Lula da Silva (PT) pointed it out as one of the main proposals of his electoral campaign.
The purpose of the proposal sent to the National Congress is to simplify the country's tax system. Industry and commerce, as well as the low-income population, are the most affected. With the reform, all taxes would be combined, becoming just one.
Advantages of Tax Reform
Initial economic growth and industrial productivity are the initial impacts. However, because it affects several aspects of the Union, including state and municipal budgets, its approval has met with resistance.
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Arthur Lira (PP-AL), Speaker of the Chamber of Deputies, wants the vote on PEC (Proposed Amendment to the Constitution) 45 to take place by next Friday (7). This is one of the main projects under discussion in the House. If approved, the proposal will go to the Senate. The Speaker of Congress, Rodrigo Pacheco (PSD), said that the vote would only take place in the second half of the year, due to the parliamentary recess.
Operation
In practice, the proposal creates a mechanism for refunding taxes paid on consumption by low-income populations. This refund would replace universal tax breaks, such as those on the basic food basket.
Consequently, a larger percentage of the revenue from these taxes would come from the middle and upper classes. This would reduce inequality, since those who consume more would pay more taxes. Likewise, those who consume less would pay less taxes.
Melina Rocha, a tax specialist, highlights that this model is fairer, but would still benefit the neediest population.
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“The poorest family will benefit, as the government will be collecting more from those who have the greatest capacity to pay taxes and will apply this money to public policies that generally benefit the poorest,” he declared.
Employees will receive a new monthly allowance of R$ 2,100.
