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    Lira determines installation of commission on tax reform next Tuesday

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    According to the PEC, states and municipalities will be able to create their taxes on income and assets in the form of an additional federal tax (Image: Fabio Rodrigues Pozzebom/Agência Brasil)

    The Speaker of the Chamber, Arthur Lira (PP-AL)determined the installation of special commission next Tuesday (24) to begin the analysis of PEC 7/20, which changes the entire Brazilian tax system.

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    The text replaces all current tributes with just three classes of taxes: on income, consumption and property.

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    On the occasion, the president of the commission and the rapporteur of the text, who had admissibility approved by Constitution and Justice Commission and Citizenship in November 2021.

    • Learn more about the processing of proposed amendments to the Constitution

    The proposal was defended by deputy Bia Kicis (PL-DF), who demanded the reading of the act of installation of the collegiate. “In my view, it is the best tax reform proposal that we have today in the Congress.

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    I believe that this is the one that best reflects the aspirations of the population, of society in relation to a tax reform that is clear, transparent, and efficient”, he said.

    The text is authored by deputy Luiz Philippe de Orleans e Bragança (PL-SP). Among other points, the text determines the extinction of practically all current taxes.

    In their place, only the three tax bases (income, consumption and property) would be instituted, which could be charged indiscriminately by the three administrative spheres.

    Today, the three bases are taxed exclusively by the Union. States mainly tax consumption and municipalities, property.

    According to the PEC, states and municipalities may create their taxes on income and assets in the form of an additional federal tax, delegating their collection to the federal tax authorities.

    To avoid the “cascade effect”, the consumption tax will only be levied at the stage of sale to the final consumer in the state of destination of the goods.

    The collection of taxes on transactions between companies and the use of tax substitution (where a company pays for the rest of the production chain) would end.

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    Source: Moneytimes

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