Finance Minister Fernando Haddad said on Sunday that he reached an agreement with congressional leaders to “recalibrate” the decree that increased the financial operations tax (IOF) last month, noting that the initiative will be compensated for a taxation of titles currently exempt and major charges on online bets and financial institutions.
At a press conference after meeting with party leaders, Haddad said the government will present a provisional measure this week with proposals that will compensate for a new decree to reduce the IOF, but did not present structural initiatives on the government’s expense review axis.
“This provisional measure will allow us to recalibrate the IOF decree, making its regulatory dimension the focus of the new version and we can reduce the rates of the original project,” Haddad said alongside the leaders in a press conference broadcast on Sunday night.
Haddad stressed that the point of the decree of what will be “most affected” to the measure is what has instituted charges on drawee risk operations, a modality of credit, which impact sectors such as retail. According to him, the fixed charge of 0.95% implemented on these operations will be eliminated, while the rate of 0.0082% per day, with a ceiling of 3% per year, will be recalibrated.
The minister stated that the MP will include a 5% income tax for titles that are currently exempt.
Among the roles that today have the benefit are Real Estate Credit Letters (LCI), Agribusiness Credit Letters (LCA), Certificates of Real Estate Receivables (CRI), Certificates of Agribusiness Receivables (CRA) and encouraged debnts, which serve as founding for agribusiness activities, construction and infrastructure investments.
In the interview, he argued that these securities will continue to encourage despite the new tax, as the 5% rate will still be lower than those charged in other investment instruments, such as government securities, which suffer at least 15%.
BETS AND BANKS
The minister also said that a higher taxation will be proposed on “Bets”. The charge will be 18% of the so -called “Gross Gaming Revenue” (GGR), the revenue of the betting company after the deduction of the prizes paid to the winners and the income tax. Today, the rate is 12%.
Haddad also announced greater collection of financial institutions for social contribution on net income (CSLL).
“There will be (also) an approximation of bank rates. Today financial institutions pay three rates – 9%, 15% and 20% -, 9% will no longer exist,” he added.
The package will be presented after the return of President Luiz Inacio Lula da Silva to Brazil, which will occur on Tuesday. The minister did not present the potential tax impacts of the initiatives.
In a presentation to parliamentarians, the farm also proposed a limitation of tax compensation and a crypto taxation, but both topics were not addressed by Haddad in the interview.
The government will still propose a 17.5% unified rate of income tax on financial investment income, two sources with knowledge of the matter told Reuters.
According to the sources, the rate will be valid for all applications except those incentive. With this, gains from operations such as fixed income and actions will be impacted.
By the rule currently in force, General Fixed Income Instruments – such as Bank Deposit Certificate (CDB) and National Treasury Titles – have rates ranging from 15% to 22.5% depending on the application deadline.
In the case of shares, the capital gain of ordinary operations are now taxed at 15%, while those of “Day Trade” have an incidence of 20%.
Tax benefits
In addition to the MP, Haddad also pointed out that Government and Congress agreed to discuss a reduction in “at least 10%” of tax incentives that are not defined in the Constitution. The initiative had been anticipated by Reuters.
On a final axis left open by the minister, he said that initiatives will be rediscussed to reduce primary spending that are already in process or have passed through the legislature.
“Of the topics that have already been appreciated, or which are in processing, or that we can move forward, we are technically available to draw these new formats, but we need the leadership pulse to return to the table,” he said.
The announcement occurred after days of impasse on the government’s decree that raised the rates, generating negative repercussions in the financial market and between parliamentarians, which threatened to overthrow the measure.
