In an interview to Valor Econômico newspaper, our partner Ana Cláudia Utumi talked about the possiblle application of international models which the Brazilian government has been studying in the context of the country’s tax reform.
According to the story, the federal government has reinforced that the tax reform will be decided by the Brazilian Congress. The idea is that a new text will be drawn up based on two Proposed Amendment to the Constitution (PEC). Both of which establish cashback of the new Value Added Tax (VAT), point that was analysed by our partner in the news.
According to her, “would be important to include in the new law that one of the basic principles of the new taxation is that part of the IBS collected be used to subsidize low-income consumers.”
This way, she notes, the amonts determined as a refund for cashback will have a legal basis to ensure that, being a subsidy, it will not be necessary to tie such amounts to a specific spending reduction or revenue increase.