The tax reform that the government wants to pass in Congress could have a devastating effect on consumers’ pockets. According to the Brazilian Association of Supermarkets (Abras), the proposal can increase by almost 60% the taxes that affect the products of the basic basket and hygiene. The organization met on Saturday (1/07) with the Minister of Finance, Fernando Haddad, to ask for changes in the text.
Abras calculated the impact of the reform on the prices of items such as rice, beans, meat, eggs, vegetables, among others. The association considered the 50% reduction in the standard rate of VAT (Value Added Tax) provided for in the proposal, which is 25%. The result was frightening: the states of the South would have an average increase of 93.5% in the tax burden on the basic food basket. The Midwest and Southeast regions would come next, with increases of 69.3% and 55.5%. The North and Northeast regions would have smaller increases, but still expressive: 40.5% and 35.8%.
The president of Abras, João Galassi, said that the tax reform is necessary, but it cannot penalize low-income consumers. He defended that the basic basket products are exempt or have a reduced rate of VAT. “We cannot accept that the tax reform is carried out at the expense of the poorest. The products in the basic food basket are essential for the population’s diet and health. The government needs to review this proposal and ensure that there is no increase in taxes on these items, ”he said.
The tax reform aims to simplify and unify taxes on consumption and create a Regional Development Fund, with R$ 40 billion, to finance projects in less developed states. The rapporteur for the matter in the Chamber of Deputies is parliamentarian Aguinaldo Ribeiro (PP-PB), who should present his opinion this week.
The Extraordinary Secretary for Tax Reform, Bernard Appy, contested the Abras figures and said they are “misleading”. According to him, the association did not take into account the benefits of the reform for the supermarket sector, such as the recovery of tax credits that are currently not used. Appy also said that the tax burden on the basic food basket should remain close to the current one, even with the reform. “Abras is doing a wrong calculation and misinforming society. The tax reform will bring more transparency, efficiency and fairness to the Brazilian tax system. There is no reason for alarmism or resistance,” he declared.
The tax reform that the government wants to pass in Congress could have a devastating effect on consumers’ pockets. According to the Brazilian Association of Supermarkets (Abras), the proposal can increase by almost 60% the taxes that affect the products of the basic basket and hygiene. The organization met on Saturday (1/07) with the Minister of Finance, Fernando Haddad, to ask for changes in the text.
Abras calculated the impact of the reform on the prices of items such as rice, beans, meat, eggs, vegetables, among others. The association considered the 50% reduction in the standard rate of VAT (Value Added Tax) provided for in the proposal, which is 25%. The result was frightening: the states of the South would have an average increase of 93.5% in the tax burden on the basic food basket. The Midwest and Southeast regions would come next, with increases of 69.3% and 55.5%. The North and Northeast regions would have smaller increases, but still expressive: 40.5% and 35.8%.
The president of Abras, João Galassi, said that the tax reform is necessary, but it cannot penalize low-income consumers. He defended that the basic basket products are exempt or have a reduced rate of VAT. “We cannot accept that the tax reform is carried out at the expense of the poorest. The products in the basic food basket are essential for the population’s diet and health. The government needs to review this proposal and ensure that there is no increase in taxes on these items, ”he said.
The tax reform aims to simplify and unify taxes on consumption and create a Regional Development Fund, with R$ 40 billion, to finance projects in less developed states. The rapporteur for the matter in the Chamber of Deputies is parliamentarian Aguinaldo Ribeiro (PP-PB), who should present his opinion this week.
The Extraordinary Secretary for Tax Reform, Bernard Appy, contested the Abras figures and said they are “misleading”. According to him, the association did not take into account the benefits of the reform for the supermarket sector, such as the recovery of tax credits that are currently not used. Appy also said that the tax burden on the basic food basket should remain close to the current one, even with the reform. “Abras is doing a wrong calculation and misinforming society. The tax reform will bring more transparency, efficiency and fairness to the Brazilian tax system. There is no reason for alarmism or resistance,” he declared.