CNM: Exemption of IR exemption will cause losses of R $ 11.8 billion to municipalities
The National Confederation of Municipalities (CNM) stated that there will be a drop of R $ 11.8 billion annual funds for the municipalities with the expansion of the income tax exemption range for those who earn up to R $ 5,000. The balance was made without the knowledge of the compensation to be proposed by the government.
In preliminary data released on Monday, 17, the entity says that the income tax concentrates, on average, 16% of the municipal collection, but the percentage is higher among small municipalities. According to a report, every R $ 100 reais collected, R $ 25 come from the tax.
In the study, the CNM says that the impact of IR expansion occurs on its own collection, as the measure will lead more occupations of municipal functionalism not to contribute to the Retained Income Tax (IRRF).
IR exemption: Lula signs this Tuesday bill for those who earn up to $ 5,000
The signature will be at an event scheduled for 11:30 am at the Planalto Palace
Haddad says IR exemption cost up to $ 5,000 has been reduced by $ 8 billion
According to the minister, after the conversation with the Legislature’s command, Lula “probably” announces the final proposal on the subject this week
Another impact occurs through the IR collected by the Union and distributed via the Municipal Participation Fund (FNM). According to the simulations, there will be a 15% reduction in tax revenues (R $ 4.9 billion) and 3% in FPM (R $ 6.9 billion).
“The study does not yet consider the eventual gain in the collection of IR if the Union Tributes more the individuals with high income in order to compensate for part of the loss of revenue announced by the Ministry of Finance. In fact, the government is disclosing that the measure will have zero fiscal effect, for this they will tax the richest. The problem is that the reach of this new taxation is uncertain, ”says the document.
The text goes on: “CNM points out that the revenue reduction of municipalities further weakens the position of municipal entities within the federative pact, marked by the substantial increase in obligations and insufficient financing”. The entity also pointed out that “financial compensations that limit the loss presented may alleviate, at least temporarily, the complicated fiscal situation currently faced.”
On Tuesday, 18, a ceremony is scheduled at the Planalto Palace for the promotion of the project, the main bet of the year for the recovery of the popularity of President Luiz Inacio Lula da Silva. To enter into force, the proposal must be approved in Congress.
