Bernard Appy, secretary for Economic Policy of the Ministry of Finance, presented the Senate a federal government promise that the tax system reform proposal, to be submitted to the National Congress by the middle of the year, will simplify the indirect tax mechanism. Also it will reduce tax evasion without increasing tax burden and give an end to “fiscal war” between federal states. In addition to that, the reform will increase investments, improving regional development pillars.

- It will be a revolution – Appy summarized, during the meeting of the Temporary Subcommittee on the Tax Reform, headed by senator Tasso Jereissati (PSDB-CE).

According to Bernard Appy, the difference between this proposal and the previous one is that the creation of the electronic receipt and also the acknowledgement that the fiscal war between states damages them all have created conditions to changes that are currently under analysis.

- Now we need to get as much consent as possible between federal government, states and municipalities, along with businesspeople and politicians – said Appy.

Among unsettled issues is the competency for collecting the states’ Tax on Added Value (IVA). As to the rational use of the system, he explained, the ideal is that the tax is collected in the state where a product is sold. However, collecting a fraction in the state the product came from could stimulate monitoring of this tax.

Appy explained the electronic receipt – meant for any company with a computer and access to the internet – will not only lead to stricter monitoring, but also provide the government a safe data basis to fix the aliquots and set compensations between companies, states and municipalities in order to restrain the number of losses in the system.

- Losses will only come for tax evaders – said Appy.