The Nucleus for Fiscal Studies (NEF) of FGV’s Sao Paulo Law School (Direito SP) organized the meeting “Tax Reform and normative design of the new Tax on Goods and Services", which was attended by Vasco Branco Guimarães, a visiting professor from the University of Bologna (Italy) and member of the group that carried out the income tax reform in Portugal. Guimarães also following the final phase of implementation of the VAT (Value-Added Tax) and is a lawyer at the Court of Justice of Portugal.

The expert is very optimistic about the conditions of implementation of the IBS (Tax on Goods and Services) in Brazil, one of the leading reform proposals that is being mentioned by the presidential candidates, formulated by CCiF (Centro de Cidadania Fiscal).

“Brazil fulfills all the conditions to implement the IBS very successfully”, said the professor. “It doesn’t lack a single thing. The collection and recovery systems are already highly computerized. And there is the real possibility of turning all the huge mass of conflicts that is created artificially or are even relevant into a manageable number of disputes”, said the expert.

According to the proposal, the IBS would replace the five taxes on consumption (ICMS, IPI, ISS, PIS and COFINS) that are distributed by the federal entities, each with a distinct competence, management and organization.

For Aldo de Paula Júnior, a professor from Direito SP, the major obstacle of previous reforms was the federative discussion and the difficulty of the federal entities to give up their competences, as they would be centralized by a federal entity.

“This obstacle was overcome in a very clever way, because, besides being simpler, the IBS doesn’t interfere with the financial autonomy of the federal entities. It’s a shared competence among them, unlike what is currently provided for by law”.

Thus, according to the professor, it would safeguard the right of each federal entity to establish the rate of such taxes in its territory, taking into account its budgetary needs and complying with the immutable clauses of article 60, paragraph 4 of the Constitution.

For researcher Eduardo Salusse, from the litigation point of view, the new IBS identifies the pathologies of our current system. “We’re still not sure about what we want, but we definitely know what we don’t want and, from this point on, we’ll build a new model.

Salusse mentions some examples that can be incorporated into the litigation design of the new tax, such as the “conformity law”, in the state of Sao Paulo, which relies on the participation of taxpayers to create solutions in state tax litigation.

The researcher warns that the new IBS will not definitively extinguish the number of disputes, but it should reduce them significantly. “Many disputes take place within the framework of procedure, with respect to time and procedural issues. However, there are also issues of merit”, he said.

Vasco Branco Guimarães also believes in reducing the number of cases involving tax law, but not their extinction. “Taxes without conflicts and litigation are not taxes, but donations”.