Lula government has no basis to approve matters in Congress, says Lira

The president of the Chamber of Deputies, Arthur Lira (PP-AL), said this Monday (6/3) that the government of President Luiz Inácio Lula da Silva (PT) still does not have a “consistent” base in the National Congress to approve projects. According to him, it will still take time for the base to be consolidated, but at the moment the Executive does not have enough votes to negotiate matters, as is the case of tax reform, neither in the Chamber nor in the Federal Senate.

The statements were made during a lecture given to directors of the Commercial Association of São Paulo. Lira also stressed that the government’s stabilization should happen before the tax reform reaches the plenary.

“We will have time, too, for the government to stabilize itself internally. [antes de votar a reforma tributária]because today the government still does not have a consistent basis, neither in the House nor in the Senate for simple majority matters, let alone constitutional quorum matters”, said the president.

In a meeting with businessmen, Lira said that there is a “tireless effort” to approve the measure in a “possible” way. The president also defended the creation of a working group to analyze the tax reform. The GT is made up of 12 deputies, who represent the main parties in the Chamber.

To interlocutors, the president had already mentioned the possibility of the reform being approved in plenary as early as May, after the WG presented its final opinion. The document should be a junction between the Proposed Amendment to the Constitution (PEC) 45/19, from the House, and PEC 110/19, from the Senate, which simplify the tax system by creating a single tax to replace a series of taxes on the consumption.

The reform is considered a priority by the PT party in the Legislative House and by the allied base of the government of President Luiz Inácio Lula da Silva (PT) in the National Congress.

What does the reform say?

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The measure that provides for the simplification of taxation on consumption will be based on two proposed amendments to the Constitution (PEC) in progress in Congress, and the government will be able to add or remove some points. Both PECs bring together several taxes that today focus on consumption in less taxes.

  • PEC 45/2019
    PEC 45 provides for the creation of the Tax on Goods and Services (IBS). The tax would replace two contributions – the Social Integration Program (PIS) and the Contribution for the Financing of Social Security (Cofins) – and three taxes – the Tax on Industrialized Products (IPI), the Tax on the Circulation of Goods and Services ( ICMS) and the Tax on Services (ISS).
  • PEC nº 45/2019 is the text of the Chamber to regulate the tax reform. Currently, the matter is at a much more advanced stage than PEC nº 110/2019, which is being processed in the Senate.
  • PEC 110/2019
    PEC 110 creates two taxes: the Contribution on Goods and Services (CBS), which would remain with the Union, and the Tax on Goods and Services (IBS). Under the proposal, CBS would replace Cofins, PIS and the Civil Servant Asset Formation Program (Pasep).

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