The final text does not mention guns in the Selective Tax, which aims to discourage the consumption of certain goods and services; understand
In the midst of the back and forth of tax reform, enacted on the 20th, the weapons and ammunition were excluded from the list ‘sin tax‘ – nickname given to the Selective Tax (IS), a ‘third’ tax that aims to discourage the consumption of certain goods and services.
The Selective Tax has a similar function to that previously attributed to the Tax on Industrialized Products (IPI). According to the text promulgated by the discussions of PEC45/2019 inserted into the Federal Constitution by Constitutional amendment nº 132/2023, The production, extraction, marketing or import of goods and services harmful to health or the environment are now subject to surcharges. But now the weapons are not mentioned by name.
In a previous version of the tax reform text, as highlighted by Terra, It was even expected that the selective tax would also apply to weapons and ammunition, “except those intended for public administration”.
The lawyer, doctor of international law and coordinator of social and economic justice of Oxfam Brazil, Jefferson Nascimento, explains to the journalist that the measure, supported by the Senate, was overturned by the House in the last vote on the tax reform. “Without a doubt it is a setback”currency.
“What remains is a bad taste in the mouth. Now a broad debate begins, which will also take a long time,” he says, adding that he has already received a signal from the government that selective tax regulation will be one of the priorities of the year.
What changes in practice?
Among the innovations proposed by the tax reform is the simplification of consumption taxes. There will be two, in addition to the Selective Tax for non-fiscal purposes:
- CBS (Contribution on Goods and Services), which will unify the federal taxes PIS, Cofins and IPI;
- IBS (Goods and Services Tax), which will unify the ICMS and ISS, state and municipal taxes, respectively.
Currently, weapons and ammunition are subject to a higher tax rate than other goods, considering the harmful nature these items can cause. This taxation is carried out by the IPI, which will lose its extra-fiscal nature with the unification of taxes proposed by the reform.
The person who will perform this function will now be the Selective Tax, but By eliminating weapons and ammunition from the selective tax, the arms industry could benefit from tax reform.
“There is now no provision ensuring that these goods have a tax rate different from the average tax rate applicable, for example, on food, children’s school supplies, books and others. This makes no sense,” explains the expert.
Is it still possible to reverse the issue?
Taxes are being replaced, but it is not yet known what their rate will be. There is still no certainty about selective tax rates, nor about future CBS and IBS. This will be discussed in this new phase of tax reform.
What is expected is that the selective tax, applied on revolvers and pistols, will be set on the basis of this difference between the basic rate of CBS and IBS, so that, at a minimum, the current rate is maintained.
“Since it was not possible to explicitly provide for weapons and ammunition in the Constitution in the context of selective taxation, what should be done is to discuss this topic in the context of its regulation,” explains Jefferson.
One possible avenue, which he mentioned, is to promote the debate so that the topics are included in the current scope of IS due to their impact on health.
What was withheld?
- Rate reduction
The Chamber of Deputies initially approved the tax reform with an ambiguous description of operations that would benefit from a 60% reduction in tax rates. It was established that the reduction could be granted in cases of “goods and services related to national security and sovereignty, information security and cyber security”.
According to the Oxfam representative, this section was included in the project at the end of the tax reform process in the House, in the middle of the vote on the agglutinative agenda. «It was a topic that did not undergo any type of debate in the months in which PEC 45 was drawn up in the Chamber and it caused us a lot of concern».
In accordance with what was proposed by the organizations, the Senate reversed the order of the sentence. The change was supported by the House and appears in the final text of the now Constitutional Amendment 132:
Art. 9 …………….. § 1 The complementary law will define the operations that benefit from the 60% (sixty percent) reduction in the rates referred to in the caput among those relating to the following goods and services: …………… ………….. XIII – goods and services related to sovereignty and national security, information security and information security.
Therefore, if it were possible to restore the surtax on weapons and ammunition, there would be no argument in favor of reduced tariffs for cases not aimed at national security.
- Breach that weakens ISIS
In general, a paragraph has also been maintained that weakens the dynamics around the Selective Tax. As already explained in the report, this section prevents the selective tax from being applied on goods and services at a reduced rate:
Art. 9…….. § 9. The tax provided for by art. 153 VIII of the Constitution does not apply to goods or services whose tariffs are reduced pursuant to § 1
For the Oxfam representative, this is an even more worrying point as weapons and ammunition no longer fall within the scope of application, at least explicitly, of the Selective Tax – but in any case the debate on this section goes beyond the issue of industrial armament .
Nascimento cites agricultural inputs – expected as liabilities for a 60% tax cut, but which, without more precise details, can be considered as part of these inputs as pesticides. “There will be a debate on the application of the selective tax, since due to this ninth paragraph of article nine, one thing ends up blocking the other,” ends.
What are the current taxes on guns and ammunition?
To date, as mentioned in the technical notes released jointly by the Instituto Sou da Paz and Oxfam Brasil, IPI, PIS/Confins and ICMS apply to armaments.
Taking into account the data from Rio de Janeiro and Sao Paulo, the taxation is given as follows:
Revolvers and pistols
• IPI (federal): 29.25%
• PIS/Confins (federal): 9.25%
• ICMS (state): 37% in RJ and 25% in SP
• Total taxation: 75.5% in RJ and 63.5% in SP
Parts and accessories of revolvers or pistols
• IPI (federal): 29.25%
• PIS/Confins (federal): 9.25%
• ICMS (state): 37% in RJ and 25% in SP
• Total taxation: 75.5% in RJ and 63.5% in SP
Cartridges
• IPI (federal): 13%
• PIS/Confins (federal): 9.25%
• ICMS (state): 37% in RJ and 25% in SP
• Total taxation: 59.25% in RJ and 47.25% in SP
In 2018, according to the institutions’ technical note, the total taxation for revolvers and pistols was 91.25% in RJ and 79.25% in SP.
Why is it important to overload weapons?
The project manager of the Sou da Paz Institute and master in Public Policies, Bruno Langeani, listened to by Earth last December, believes that what motivates particular attention to the taxation of weapons and ammunition is the set of secondary damages that these products cause to society.
“In Brazil, more than 70% of murders are committed with firearms. In addition to these violent deaths, firearms are also an element used for a number of other crimes that impact society and the development of a country. If a company closes because it can no longer bear being robbed or a person stops studying at night for fear of being raped, the impact is huge on the country’s GDP,” he believes.
Furthermore, a study by the Instituto Sou da Paz published this year, referring to last year’s data, estimates annual expenditure of R$41 million in the Unified Health System (SUS) aimed at treating people hospitalized due to gunshot wounds. The expenditure is 59% higher than the amount allocated to treat other forms of aggression. “A product that causes so much damage, so much damage, cannot be an economic product,” adds Langeani.
Source: Terra
Rose James is a Gossipify movie and series reviewer known for her in-depth analysis and unique perspective on the latest releases. With a background in film studies, she provides engaging and informative reviews, and keeps readers up to date with industry trends and emerging talents.
