With exemptions for dividends, income tax reform brings more losses than gains, says former advisor to Guedes
BRASÍLIA (Reuters) – The income tax reform would bring more losses than gains to society based on the latest opinion on the bill in the Chamber of Deputies, said Vanessa Canado, tax consultant and former advisor to the Minister of Economy, Paulo Guedes.À Reuters, she assessed that the changes made to the report show that the discussion on taxation of dividends in the country is not mature, strongly criticizing the withdrawal of small business partners among those who would now bear the 20% tax rate on profits. “The Income Tax reform would initially bring more social justice, but after this exclusion of Simples companies, this 6% regularization of assets abroad, all this took away a lot of perspective of social justice”, said Canado, who is PhD in tax law. “So you continue to have unjustifiable exceptions that would pay less taxes,” he added. ed in Simples and those that declare in the presumed profit with sales of up to 4.8 million among those that will not need to pay the tax. For Canado, the onslaught “goes in the completely wrong direction”. She argued that the fact that small businesses in Brazil are the biggest generators of jobs often ends up precluding a necessary debate, since there is no empirical evidence supporting that there is any gain for the country with the owners of these businesses remaining free from any taxation. on the profit.Canado pointed out that the companies that are in Simples pay very little employer contribution to fund Social Security. As a result, they end up having a lower cost of hiring labor and, therefore, they employ more. “Exactly because you don’t tax the same way, they generate more (vacancies)”, she pointed out. For Canado, the facilities offered by the government small companies should be focused more on the regulatory aspect than on the tax one, so that the minors would bear less complex and onerous ancillary obligations. The logic would be similar to that established in Brazil for fintechs. Amid complaints from the big banks that many of them, indeed, would have already become too big, taking advantage of the lighter prudential treatment, the Central Bank has already carried out a public consultation to publish a new framework in this regard. “What the dynamics of developed countries show is that you have many gains in terms of competitiveness and job creation when companies stop being small and become bigger”, said Canado. , via tax waiver, there is a strong interruption in this process, she added. At the same time, large companies start to operate in lower competitive conditions because they do not have these benefits, which makes it difficult, for example, for them to innovate or modernize. “No wonder that our industry is dying,” said the expert. The analysis of the text of the IR reform has already been postponed three times in the Chamber of Deputies and, in On Thursday, Economy Minister Paulo Guedes stated that if the text is not constructive, he prefers that the proposal does not go ahead. The vice president of the Chamber of Deputies, Marcelo Ramos (PL-AM), told the Reuters last week that the reform had gone up on the roof. While instituting a 20% rate on dividends, the bill reduces by 10 points the total burden of legal entities, including income tax and CSLL, to 24%. Individuals, the reform ends the possibility of a simplified 20% discount for those who earn more than 3,333 reais a month. The reform also proposes that those who earn up to 2,500 reais a month will be exempt from paying income tax. Today, the exemption range goes up to 1,903.98 reais. The bill also provides for a window for taxing profits earned abroad at the rate of 6%.Free course teaches stock exchange consistency to earn and monetize capital. Participate!