In an interview with WWtax lawyer Luiz Gustavo Bichara stated that the Federal Supreme Court (STF) should maintain the decision that suspended the increase in the tax on financial operations (IOF). The analysis considers the governmental decree “grossly unconstitutional”.
According to Bichara, the charge is currently suspended by an injunction of STF Minister Alexandre de Moraes. The expert points out that the legal community expects the maintenance of this decision, noting that the decree was implemented without proper prior dialogue with the affected sectors.
Constitutional Basis of the dispute
The taxpayer explains that legal controversy is relatively simple. IOF is classified as a regulatory or extrafiscal tax, which means that it cannot have a collection function, as established in the Federal Constitution.
The Constitution releases the IOF from constitutional limitations to the power to tax, dismissing the requirement of law in the strict sense and the principle of priority. This allows tax changes to go into force the next day, but only for regulatory market purposes, never for collecting purposes.
Regarding taxpayers, pussy assures that, at the moment, there is no need for additional payment, since the charge is suspended. The expert demonstrates confidence that the Supreme Court will maintain the rapporteur’s injunction, invalidating the increase in tax.
