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Macaé embraces the Tax Reform allowing its own IBS rates, a framework that offers autonomy and also provokes a debate on the possibility of increasing reference charges
Macaé, city of Rio de Janeiro, obtained authorization with the recent Tax Reform to establish its own Tax on Goods and Services (IBS) rates. This new tax appears to replace the ICMS (Tax on Circulation of Goods and Services) and ISS (Tax on Services), unifying them. While defenders of the new system allege that it ensures autonomy for states and municipalities, critics argue that it could encourage a higher reference charge, making it difficult to simplify the National Tax System.
Autonomy and the Critics of the Reform
Tax Reform critics use this format to highlight their objections to the proposal, claiming that such autonomy could potentially undermine efforts to streamline the National Tax System. However, supporters reject this argument as they believe that variations in rates between different locations would be limited. According to them, the new measure guarantees the autonomy of states and municipalities, an aspect claimed by critics of the proposal.
Additionally, there is a relevant political cost that may discourage the application of a higher charge than that practiced in other parts of the country. This can be perceived as an advantage or a disadvantage, depending on the perspective.
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Tax Changes and their Implications
The Constitutional Amendment Project (PEC) approved in the Chamber of Deputies proposes the unification of five consumer taxes into two new ones, the IBS and the federal CBS (Contribution on Goods and Services). The transition would begin in 2026, with full migration expected in 2033.
After the enactment of the PEC, a resolution of the Federal Senate will determine the tax reference rate for each federative sphere. The local legislature must approve a specific law that will define the level of collection in its territory, even if this implies a different rate from other locations.
Experts argue that federative autonomy, a principle enshrined in the Constitution, will be ensured by this measure. Currently, this freedom already exists: each state or municipality defines the rate to be charged from taxpayers.
Clarifications and Doubts About Tax Reform
According to the PEC, the charge defined by each entity will be the same for all operations with goods or services, with the exception of specific or favored regimes. Even if an entity wishes to adopt a higher or lower rate, it will be the same for all goods and services covered by the IBS.
Critics such as economist Felipe Salto warn that the varied needs can act as a stimulus to pressure those who will subsidize the Senate with the calculation of the reference rate. Salto suggests setting a band, with minimum and maximum rates for the new taxes, in the complementary law that will regulate the Reform.
In general, the Tax Reform paves the way for the fiscal autonomy of municipalities as Macae, generating a space for heated debates about the possible consequences of this new fiscal era in Brazil.
