Brasília, August 21, 2003 (Agência Brasil - ABr) - Repesentatives of commercial associations from all over Brazil met in Brasília to protest against possible tax increases as a result of tax reform. At the end of their meeting yesterday morning (20), they presented various party leaders in the Chamber of Deputies with a document headed by the slogan "Enough! Taxes are going down the drain." The protestors affirm that tax-payers wlll pay the bill, if taxes increase. Taxes currently represent 36% of the Gross Domestic Product (GDP).
For the president of the Federation of Commercial and Entrepreneurial Associations, Luiz Otávio Gomes, the report presented by Deputy Virgílio Guimarães was very disappointing for tax-payers. In Gomes' opinion, if the proposal is approved as it stands, the tax burden will increase 3%, attaining 39% of the GDP. Gomes speaks for two million members of associations; 85% are owners of micro and small firms.
The president of the São Paulo State Commercial Association, Afif Domingos, said that tax payers are going to be shafted, because the report contains no prohibition against future tax increases. "In the fight between the sea and the shore, shellfish get the short stick," Domingos remarked, referring to negotiations between the federal government and state governors over tax reform.
For Domingos, the lack of definition of sales tax rates (ICMS - Tax on the Movement of Merchandise and Services) represents a big risk for tax-payers. In his opinion, the setting of tax rates by the Fiscal Policy Council (Confaz) could compensate the states, in exchange for a split in the CPMF (the "check tax"). "This way, the ceiling becomes the tax," is what he bets will be the outcome.
During the protest, Gomes informed that he has already spoken with various governors, among them the governors of Minas Gerais, São Paulo, and Rio Grande do Sul, and all of them promised to take into account the concerns of tax-payers. Nevertheless, they want the ICMS rates to be determined by the Confaz, made up of state secretaries of Finance and the Minister of Finance, Antônio Palocci. According to the entrepreneur, the governors assert that this would be the only maneuvering room left to them.
The entrepreneurs want the debate over fiscal reform to precede tax reform, so that federal, state, and municipal revenues and expenses are set beforehand. "The report, the way it stands now, is a quick and dirty repair of leaky pipes," Domingos asserted. For Gomes, the tax reform proposal will only resolve the federal government's cash flow problems, since both governors and mayors are complaining. "The only one who isn't complaining is the federal government. So, something must be wrong," the entrepreneur observed. (DAS)
