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The vote on Tax Reform may take place in the Chamber by the end of this week. Understand how it works and the voting schedule!
Tax Reform has been the subject of debate in Brazil for years, but in 2023, there is a real expectation of approval. President Luiz Inácio Lula da Silva (PT) pointed to it as one of the main proposals of his election campaign.
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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, as well as industrial productivity, are the initial impacts. However, because it affects various aspects of the Union, including state and municipal budgets, its approval has encountered resistance.
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Arthur Lira (PP-AL), president 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 bills under discussion in the House. If approved, the proposal will proceed to the Senate. The president 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.
How it works
In practice, the proposal creates a mechanism for refunding taxes paid on consumption by the low-income population. This refund would replace universal tax exemptions, such as those for basic food items.
Consequently, a greater 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 specialist in tax matters, emphasizes that this model is fairer, but would still benefit the population most in need.
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“The poorest families will benefit, as the government will be collecting more from those with a greater ability to pay taxes and will invest that money in public policies that generally benefit the poorest,” he declared.
Employees will receive a new monthly benefit of R$ 2,100.
