JULIA CHAIB AND JOÃO GABRIEL
BRASILIA, DF (FOLHAPRESS)
The Tax Reform approved by the Chamber of Deputies proposes advances in preserving the environment, but still demands improvements and regulation, point out experts and members of organizations that follow the topic.
The text leaves a series of loopholes for companies that deforest and pollute to receive tax exemptions without taking this criterion into account, according to experts. For them, the proposal does not provide mechanisms to tax high-impact activities, such as fossil fuels, nor does it provide benefits for low-impact activities.
One of the concerns raised by environmentalists during the text’s processing in the Chamber was ensuring the correct taxation of these companies. They say there has been some progress with the creation of a selective tax.
This tax provides for the taxation of the production, sale or import of products that are harmful to health and the environment. It will replace part of the IPI (Tax on Industrialized Products) collection.
The problem is that, at the last minute, exceptions were included to the rule that could free from taxation, for example, companies linked to agriculture, which produce pesticides.
The exceptions provide that certain products will have exemptions from tax rates between 100% and 60%.
An excerpt from the text provides this reservation for “agricultural and aquaculture inputs, food intended for human consumption and personal hygiene products”. For environmentalists, this could open a loophole for companies that produce pesticides to benefit.
On another front, representatives from these sectors also worked to ensure that there was a review of the way tax benefits were granted. Folha showed that 1,112 companies fined R$2 billion by Ibama (Brazilian Institute for the Environment and Renewable Natural Resources) in the last ten years received exemptions worth R$84.2 billion in 2021 alone.
Almost 400 companies received R$12 billion in exemptions from PIS and Cofins, taxes that should be eliminated by the reform.
Most of the benefits refer to exemptions from Income Tax, which will be the target of a next stage of tax reform, according to Minister Fernando Haddad (Finance).
Experts point out that it is still not clear what the benefits linked to the IBS (Goods and Services Tax), which will replace the ICMS (state) and ISS (municipal), will be.
The text approved by deputies on July 7 included the environment in at least four passages. One of them places it as a guideline for changes related to taxes in a generic way.
“The National Tax System must observe the principles of simplicity, transparency, tax justice and balance and defense of the environment”, says the text.
Another section of the reform provides that the granting of tax incentives “will consider environmental preservation criteria”.
The topic may cause changes to benefits such as those granted by Sudam (Superintendence for the Development of the Amazon) and Sudene (Superintendence for Development of the Northeast), but the regulation of the topic was postponed for a second time, through a complementary law.
Experts estimate that these incentives are considered a priority by businesspeople and parliamentarians and have been renewed since 2001.
The Manifesto for Tax Reform 3S (Healthy, Sustainable and Solidarity), signed by a series of entities, including Inesc (Institute of Socioeconomic Studies) and Oxfam (a confederation that brings together 19 organizations around the world and works on projects to combat poverty ), assesses that there has been progress with the Tax Reform, but points out gaps in the text approved by deputies. The reform is now being processed in the Senate.
The manifesto considers that the exception included by the Chamber “is a loophole for ultra-processed products and pesticides, for example, to escape specific taxation that aims, precisely, to reduce their consumption”.
“The selective tax is a victory. Products that impact the environment will be subject to higher taxation. Now, as everything remains to be discussed later (in the complementary law), it is a complicated issue”, says Lívia Gerbasi, political advisor at Inesc .
Lívia says that the ideal would be for fossil fuels to be included on the list of products that may be subject to higher taxation, but admits that it will be an arduous task to make this happen in the Senate.
In addition to the need for the tax to be regulated via a complementary bill, Lívia also points out that, as the text is written, nothing prevents a company from being taxed by the selective tax and receiving tax exemptions — which, for her, it is a contradiction.
“We want products that are on the selective tax list to not be able to enter the tax incentive list.”
A survey carried out by Inesc shows that 75% of tax benefits have an indefinite period, that is, they remain in the Union Budget for decades.
“We would need to have a broader and more consolidated management process for these tax incentives that leads to a review. In other words, a maximum period of five years for each incentive and, for you to be able to renew it, you will have to go through this process again in Congress. For these reviews, you could introduce environmental criteria, which is what we want.”
The Tax Reform also creates the National Regional Development Fund and provides that states and the Federal District prioritize “projects that provide for actions to preserve the environment” in the application of resources.
The organizations that sign the 3S System manifesto state that they will seek changes in the Senate. “We will persist for the Senate to review the gaps”, says the position.
The note also states that the lack of mention of “climate change or the necessary reduction of greenhouse gas emissions is surprising”, in direct confrontation with the National Policy on Climate Change, which determines the inclusion of the topic in the tax system. “
A technical note prepared by Inesc and Oxfam Brasil points out that the text does not answer the question of how to ensure the adequate review of tax incentives. “The text of the substitute does not answer this question and makes the criterion chosen to indicate the list of products subject to the rate reduction quite nebulous”, says the note, produced by tax lawyer Tathiane Piscitelli.
The post Tax Reform brings environmental advances, but they are insufficient, experts say appeared first in Jornal de Brasília.
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