Revenue indicates anomalies in Simples and MEI and sees need to change the rules – 07/07/2021 – Marketplace

secretary tax authorityJose Barroso Tostis Neto said on Wednesday (7) that he sees the need for changes to the Simples Nacional rules and MEI (Individual Small Entrepreneur). The view is that loosening the rules of regulations over the years has been unnecessary.

However, trying to change the rules within the government is seen as inappropriate because it is Possibility to attract more cash Just as the executive branch tries to implement its proposals for Changes in income tax, the target of complaints from the business community.

Therefore, the view of the government is that the focus of Tostis’ speech is the passage in which he says that these changes will remain for the future, after the changes in general tax system.

“MEI and Simples were created to give a premium treatment to Micro and Small Business, but its unwarranted expansion over time resulted from the argument that the ordinary system was too cumbersome and complex and that these simpler and more favorable taxes needed to be expanded. Bigger world of companies’,” Tostes stated in the morning at a virtual seminar promoted by the Poder360 portal.

“However, we are reviewing the normal system rate and lowering it significantly [na proposta de reforma do Imposto de Renda]We understand that the next step will be to review existing distortions in MEI and Simples.”

Tostes spoke in response to Verde Asset’s chief economist, Daniel Lichenring, who stated that the government had not proposed changes to the programs and that this was causing distortions in competition.

One point missing [na reforma] And it is very important that Brazil has several systems for calculating income tax, and in practice we have simple and assumed earnings, which are two methods of calculating taxes that are a huge tax exemption. This forces the real profitable companies, the bigger Business, to pay much more taxes than the average for other businesses,” Lichenring said.

“It is unfair competition, they are less able to compete with small businesses simply because of the tax problem, so the tax system is not at all neutral. We should use this to correct these huge tax advantages being given to companies that are only given by the size of the bills. , which has no reason to exist,” the economist said.

The main tax expense of the government, Simples is a tax system created in 1996 for micro and small businesses to pay various taxes and contributions in a uniform manner and with lower payment. The goal was to reduce complexity and protect entrepreneurs.

Subsequently, the scheme was expanded to include more activities than originally planned. In 2014, for example, Congress approved the inclusion of various activities in Simples, such as medicine and dentistry.

A new flexibility was introduced in 2016, when the maximum billing limit to qualify for Simples was raised from R$3.6 million to R$4.8 million annually.

The expansions were reducing federal revenue. Today, Simples is responsible for withdrawing R$74.3 billion from the group – which represents 25% of federal tax expenditures.

The government has also leveled criticism at Simples. Unafisco (National Association of Federal Revenue Tax Auditors) prepared a study this year estimating that the total revenue limit allowed at Simples is “extremely high and outside international practice” and should be a maximum of R$1.2 million per year.

The entity considers R$44.5 billion of Simples’ total tax expenditures to be privileges, given to those who will not need to take advantage of the program.

The economic team had already trained on the changes to Simples in the first year of Jair Bolsonaro’s government, but the proposal never took off due to concerns it could attract criticism for hurting small businesses.

The view is that the proposal will meet resistance in Congress, which has approved the expansions over the years, and will end up disapproved. The new signal comes at a time when the government is already facing resistance from business to its reform proposal to Congress.

The proposal sent to Congress on June 25 taxes dividends, eliminates interest on equity (JCP) and, according to business entities, lowers the income tax rate for legal entities very timidly.

Private entities complain that the proposed cut in the text was too timid given other measures of the package sent out last month and that the text would increase the tax burden on the tip of a pencil. “There are a lot of complaints. We are trying to take the first steps,” he added. JOIDES.

The minister has already been forced to change the proposal to quell criticism and meet the needs of the business community. He intends to lower the rate for legal entities further and, as compensation, add a type of measure that was not present in the original project, and withdraw up to R$40 billion in subsidies given today to specific groups.