Chamber approves tax reform regulations; text goes to Lula’s sanction

The Chamber of Deputies approved, late this Tuesday afternoon (17), the basic text of the first regulatory project for tax reform on consumption (PLP 68/24).

The text was approved with 324 votes in favor, 123 against and only three abstentions. Deputies still need to vote on highlights (suggestions for changes) to the text and drafting amendments.

As it had already been approved by the Senate, the text will proceed, after the end of the analysis in the Chamber plenary, for sanction by the president Luiz Inácio Lula da Silva (PT).

The approved text provides details about each regime with a reduction or exemption in incidence, the refund of taxes for low-income consumers (the so-called “cashback”), international purchases over the internet and the linking of payment mechanisms with the collection system.

The federal deputy Reginaldo Lopes (PT-MG)rapporteur of the text in the Chamber, presented an opinion endorsing most of the changes made by the Senate.

Among the changes in the Chamber are the 8.5% rate for Football Corporations (SAF), the maintenance of the Selective Tax (IS) for sugary drinks and the 30% reduction in the standard rate for veterinary services and health plans. animal health.

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“All the changes that we do not accept move towards maintaining the general reference rate at 26.5%. We chose, for example, to reestablish the incidence of the Selective Tax on sugary drinks, which has an impact of 0.07% on the general rate”, stated Lopes when asking deputies to approve the project.

In a speech in the plenary, the rapporteur briefly explained 34 rejections of sections proposed by senators and the reestablishment of sections previously approved by the Chamber.

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Some of these points are:

• Return of tax substitution by which one company pays tax on behalf of another;
• Return of the list of medicines that will have lower taxation;
• Maintenance of the 8.5% rate for Football Limited Companies (SAF);
• Maintenance of the Selective Tax for sugary drinks;
• Veterinary services and animal health plans will continue with a 30% reduction.

See the main changes made by the Chamber in relation to the text approved by the Senate:

• Basic sanitation: the 60% reduction in IBS and CBS was removed; on the other hand, a mechanism was included that allows partial refunds of service payments to low-income families;

• Mineral water: the 60% reduction in IBS and CBS rates was removed;

• Biscuits: the 60% reduction in IBS and CBS rates was removed;

• Medicines: the list of medicines approved by the original text of the Chamber, which will be exempt from IBS and CBS, was resumed; it will no longer be up to Congress to approve a complementary law with the list of exempt medicines;

• Veterinary medical services: will have a 30% reduction in the rate, and no more than 60%.

Selective Tax

The Chamber of Deputies also defined that the Selective Tax (IS), known as the “sin tax”, will apply to the following items:

• Sugary drinks
• Vehicles;
• Vessels and aircraft;
• Smoking products;
• Alcoholic drinks;
• Mineral goods, including mineral coal;
• Prediction and fantasy sport contests.

Tax reform

This is the first of the projects that regulates tax reform and refers to taxation on consumption established by Constitutional Amendment 132, of 2023.

Within the scope of tax reform, reform on income and assets is still expected, with no proposals yet presented.