President Jair Bolsonaro signed today (the 16th) the Legal Taxpayer Provisional Measure (MP), which aims at the regularization and resolution of tax conflicts between the federal administration and taxpayers indebted to the Federal Government. “It is one more measure that aims to meet the aspirations of many, not only those who have some debt, but also those who wish to undertake a business”, said the president, during a ceremony at the Planalto Palace. The news comes from Agência Brasil.
According to Bolsonaro, in addition to “giving a second chance to those who did not succeed in the past and have a large debt”, the MP is “helping greatly the magistrates throughout Brazil who have on their desks an enormous quantity of cases dealing with tax matters”. For the president, the government is ceasing to be “socialist in the economy”, becoming leaner, and making the business environment lighter and more entrepreneurial.
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“There is an enormous interference on the part of the State over those who produce, and we cannot look at the taxpayer, [at] those who produce, and have an idea that there is merely a source of revenue for us”, he said, nicknaming the measure the Second Chance MP.
According to the Ministry of the Economy, the MP prioritizes negotiated solutions and seeks to reduce litigation and, with this, may assist in the regularization of 1.9 million debtors, with debts totaling R$ 1.4 trillion, in addition to closing hundreds of thousands of cases involving more than R$ 640 billion.
Legal Taxpayer – new mechanism
The Attorney General of the National Treasury, José Levi, explained that the MP regulates the tax transaction, provided for in Article 171 of the National Tax Code (Law No. 5,172, of 1966). The mechanism, according to Levi, is a fiscally fair alternative to the practice of special installment programs (Refis), “proven to be inefficient, because they benefit perfectly viable taxpayers, fully capable of fulfilling their tax obligations”.
“On the other hand, these same installment programs, these Refis, do not adequately serve taxpayers in a truly degraded economic-financial situation”, he said.
According to Levi, the Refis is simply an installment program, whereas the tax transaction will have a qualitative segmentation of debtors, with differentiated criteria. In this context, observing the principles of isonomy and transparency, the MP provides that the granting of tax benefits will only occur in cases of proven necessity and upon individual assessment of the debtor’s ability to pay.
For the Special Secretary of the Treasury, Waldery Rodrigues, the measure should positively impact the 2019 budget, but the impact will be stronger in 2020. The Annual Budget Bill (PLOA) for 2020, submitted to the National Congress on August 30, states that R$ 89 million need to be recomposed and, according to the secretary, the Legal Taxpayer MP is already one of the mechanisms adopted by the government for this recomposition.
Types of transaction
Tax transactions involve two modalities: transactions in the collection of the active debt and transactions in tax litigation.
Transactions in the collection of the active debt are for taxpayers classified as C or D in the Active Debt of the Federal Government, those who have irrecoverable debts or debts that are difficult to recover, such as those of bankrupt companies or companies without assets, for example. This modality targets taxpayers who have not engaged in fraudulent acts or unfair competition, who expressly acknowledge the debt to the Federal Government, and who have not disposed of assets or rights, without prior notice to the tax authorities, when required by law.
According to the Ministry of the Economy, the discounts of this type of transaction will be up to 50% of the total debt, and may increase to up to 70% in the case of natural persons, micro or small companies. Payment must be made within up to 84 months, which may increase to 100 months, and there will be the possibility of granting a moratorium (grace period for the start of payments). The discounts apply only to the ancillary portions (interest, fines, charges), not affecting the principal amount of the debt, and do not cover criminal fines or those arising from tax fraud.
Transactions in tax litigation, on the other hand, which cover cases in the Courts or in the Administrative Council of Tax Appeals (Carf), will always involve reciprocal concessions between the parties and cover debts whose legal controversies are considered relevant and widespread, as a result of tax complexity.
In this case, the government will issue public notices that may provide for discounts and a term of up to 84 months for payment. According to the Ministry of the Economy, the public notices will set out the legal theses covered by the transactions in tax litigation and the conditions for adherence. However, they may not contravene a final judicial decision, nor will they authorize the restitution of amounts already paid or offset.
Source: Agência Brasil
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