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Taxes: Supermarkets suggest a basic basket with mignon and prawns; salmon would be 60% off.

The proposal presented by the sector highlights healthy eating and food safety as principles; beers and wines would be reduced to stimulate local industry

BRASÍLIA – Entrepreneurs and managers of supermarkets delivered to the President of the Senate, Rodrigo Pacheco (PSD-MG), a proposal to regulate the new national basic food basket, created by tax reform, with a list of zero-tax foods. Filet mignon, shrimp and lobster would have the tax benefit. Salmon, soft drinks, wines and beers would have a 60% discount on the full rate, always in line with the sector’s proposal.

In the document delivered to Pacheco, which the Estadao had access, the industry claims to have adopted it as criteria for a healthy and regional diet combined with food safety. In this way, nutritious products, such as rice and beans, have ensured their presence in the zero-tax food group. Other unhealthy products, such as sausages, chocolate and ready-made desserts, have been reduced, as they are already part of the usual menu of Brazilians, says the Brazilian Supermarket Association (Abras).

In addition to Galassi, the meeting with Pacheco was attended by important industry executives, such as the presidents of Grupo Pão de Açúcar, Marcelo Pimentel, Carrefour, Stéphane Maquaire, and Cencosud, Sebastian Dario.

The new thing is the entrance of supermarkets controversy in the beverage industry, which has divided beer and spirits producers. The two defend different criteria to mitigate the excessive taxation of the Selective Tax, also called “sin tax” – created to moderate the consumption of products harmful to health, such as drinks and cigarettes, and to the environment.

Abras proposes that drinks with an alcohol content of up to 20% – including beers, wines and sparkling wines – can access the reduced rate, which deducts 60% from the standard rate of the new value added tax (VAT). The argument is that the benefit will help local producers, particularly winemakers.

“It is not fair that Serra Gaúcha producers are overcharged if they already compete with Argentine wines,” says Abras president João Galassi.

“The good news about this proposal is that it is already clear that drinks are not all the same. It is necessary to treat the different alcoholic strengths differently. We support this reasoning, since it is the model used internationally”, says Márcio Maciel, president of the National Union of the Beer Industry (Sindexerv).

The text of the law suggested by the association goes further and proposes a ban on the impact of the Selective on food products, including alcoholic beverages, such as beer, and sugary foods. A The food industry defends the fact that even ultra-processed foods are not overloaded with Selective.

Abras’ thesis is that these products would already be penalized if they fell within the reduced rate (which will collect the equivalent of 40% of the normal rate), since there must be an exchange, by the consumer, with less taxed foods. Therefore, according to the association, the selective supplement is not necessary

“Since Brazil’s entire tax rate will be very high – quite possibly the highest in the world – the percentage difference between zero and the 60% reduction in consumption taxes already presents itself as a sufficient distance, in terms of relative prices, to differentiate and encourage greater consumption of foods from the healthy basket compared to others, completely renouncing the possibility of adding an onerous selective tax on the latter”, we read in the Abras text delivered to Pacheco.

The regulation of the basic food basket, as well as three other draft tax reform regulations, is expected to be presented by the 15th by the team of the Ministry of Finance, which has divided the topics into 19 thematic groups. The basic food basket is one of them.

Treasury disagrees with Abras over basic food basket. One of these is the products that they must have access to tax benefit. The main defense is that incentives that reduce the price of food help the poorest.

The critical argument, put forward by the Treasury, is that the discount helps the poor and the rich alike, meaning that fiscal efforts are not concentrated on the poorest part of the population, as required by the economic literature.

Abras addresses the topic by arguing that the PEC approved last year has changed the perspective on the basic food basket, which it cannot be seen as a “minimum basket”.

“The list of the national basic food basket will be broad to contain a wide dietary diversity and, above all, not to discriminate against this or that type or category of food, either as a food or drink ‘for the rich’ or ‘for the poor’ , a serious but often mentioned discrimination, or even a rare or unpopular food outside its region of consumption,” the document reads.

In any case, according to the proposal, salmon, another food always remembered as a reference to the benefit that ends up on the plates of the richest, has been included in the reduced rate of the basic food basket. João Galassi’s thesis is that fish production is predominantly international and that, in this regard, the priority that the sector defends for the national industry weighs heavily.

In the document Abras also specifies that, with the composition of foods in the basic basket, it will not be necessary to implement the reimbursement – refund – as the government wants. The longer the list of products covered by the tax benefit, the less fiscal space there will be to create a tax refund program for the poorest.


The fundamental change in consumption taxation, foreseen by the tax reform, will only happen in the next decade, in 2033, but the supermarket sector has started a debate with parliamentarians who support bringing forward the timetable.

The thesis is that most of the suggested foods are no longer subject to PIS and Cofins, the federal taxes. The greatest burden would fall on states that still tax basic basket items under the ICMS.

“If you went to the doctor and he gave you a prescription that would be good for you, why would you wait 10 years to get started? If we are convinced that this nutritious, regional basket will bring clear benefits, why wait that long?” , Galassi said.

He adds that the government may include food aid in the package renegotiation of public debttheme brought forward at the Congress by Pacheco.

“We have the possibility of renegotiating debts with the States, the government could offer in return the exemption of the basic basket products that still have the ICMS”, said Galassi.

The industry has also calculated that the effective tax rate collected in supermarkets is 12% and includes revenue from PIS, Cofins, ICMS, IPI and ISS payments. By implementing the National Basic Food Basket as suggested, i.e. maintaining zero-rated, reduced-rated and other fully taxed products, the actual payment of taxes will be virtually neutral, with an effective rate of 12.9%.

Neutrality is one of the principles of the economic group involved in the reform so that there is no imbalance in public finances or an increase in the tax burden on all economic sectors. This does not prevent some segments from paying more taxes than they do today, as the service sector claims.

Rodrigo Pacheco met entrepreneurs and executives in the supermarket sector

Source: Terra

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