Brazil's government presents second bill to regulate overhaul on consumption taxes
BRASILIA, June 4 (Reuters) -Brazil's government unveiled a second bill to regulate a historic consumption tax reform on Tuesday, focusing on the administration and management of a new regional tax.
The first regulation bill had already been sent by the government of leftist President Luiz Inacio Lula da Silva to Congress in April, following approval of a constitutional amendment seen as pivotal to boosting the country's productivity by changing a burdensome system for businesses.
The reform's initial pillars merge five existing levies into a value-added tax (VAT) with separate federal and regional rates - CBS and IBS, respectively. They also introduce a selective tax targeting products considered harmful to the environment and health.
According to the new proposal, the regional IBS rate, shared between states and municipalities, will be overseen by a management committee.
This committee, not linked to any public administration body, will play a crucial role in coordinating collection activities. Its operation will be regulated by a series of rules included in the proposal.
The Finance Ministry stressed in a presentation that the federal government will provide 3.8 billion reais ($719.27 million) from 2025 to 2028 to cover the necessary expenses for installing this committee.
The bill also standardizes rules on a state tax on inheritances and donations in life, which is levied on "any asset or right to which economic value can be attributed."
The text said the rates must be progressive but freely defined by the states, respecting a ceiling of 8% established by the Senate.
($1 = 5.2831 reais)
Reporting by Marcela Ayres
Editing by Bill Berkrot
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