2023-05-09 04:09:44
“It is very important to the States that they have a defined source of financing. It is with these resources that we will attract investment to our states”
President of Comsefaz, the committee of state finance secretaries, Carlos Eduardo Xavier said this Monday, the 8th, that support for tax reform no longer happens by consensus as it did three years ago, when the members of the Federation decided to support together change to the current system.
Xavier, who is Rio Grande do Norte’s taxation secretary and took over at Comsefaz in February, says his biggest mission has been to rebuild consensus among states around reform after changes in governments.
The governors, said the president of Comsefaz, want to know, for example, how the regional development fund that will replace policies based on ICMS benefits will be financed. This is because the attraction of investments in producer states will depend on these resources.
According to Xavier, financing this fund with 5% of the collection of the new value added tax, as proposed by PEC 110, could be the way forward. “It is very important to the States that they have a defined source of financing. It is with these resources that we are going to attract investment to our states”, declared the president of Comsefaz during his participation in a debate on tax reform promoted by Fundação Dom Cabral (FDC).
He recalled that large municipalities, which do not want to lose the ISS collection, are also showing resistance to the merger of the municipal tax with the state tax in the new tax. Among the possibilities of a single federal or dual tax – that is, a single federal tax and another subnational (state/municipal) tax – Xavier considered the second option more viable. In the dual proposal, he considers it easier to create a VAT shared management committee. “Broad VAT is a frightening experience and does not give the expected results”, he pointed out.
The taxation secretary evaluated that, given the diagnosis that the current model has failed, the tax reform has never been so close to being approved. However, the perception that the proposal must finally get off the ground leads the governors to “get down to the details” and demand guarantees on how they will be compensated by the end of taxation at source, which allows for the tax benefits offered by producer states.
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