The tax reform project, which was sent by the executive power these days, is in the middle of the formal approval process in the National Assembly. Its content does not match the huge expectations that have been created and the context in which it is produced. There is such a significant deficit in public finances that the general public expected the real effect of this tax burden. In reality, the project did not generate a new tax, it caused a new collection mechanism that is expected to generate significant revenues and flows that enable sustainability over time in relation to government costs.

In the 20 previous reforms, in the last 18 years, in all cases new taxes were created that contained new tax obligations in some cases, and others were simply repeated, such as increasing tax rates or increasing tax bases, so what significantly affected taxpayers ; and most importantly, it generates significant revenues for the state treasury, to address its perennial fiscal deficit.

This irreducible tendency to want to repair public finances exclusively through revenues will always have a significant impact on taxpayers, even though on this occasion a new tax was not actually created. The redirected collection mechanism causes the same result, since it uses the exact same solution path, revenue. The project has an undeniable fundraising purpose.

The mechanism of diverted collection, which was brought about by the tax reform project, already existed: by deduction. “Large taxpayers” are selected for the application of withholding tax in a different way. Previously, the withholding tax was applied to transactions with third parties, and this time the proposal is that the mentioned mechanism is applied to the transaction of the taxpayer himself, that is, there is a self-taxation of the tax. The taxpayer calculates the withholding tax himself and continues to liquidate it and pay it monthly to the active tax collector, SRI. With which not only income is ensured, but a steady, constant flow.

It should be emphasized that the creation (modification or extinguishment) of taxes requires a norm with a legal hierarchy (Article 301 of the CRE), which, as we have already noted, does not appear in this project. Therefore, for the purpose pursued by this tax proposal, a rule with a hierarchy of laws is not necessary. Therefore, the executive power could implement it with any other by-law order, lower in the hierarchy than the law. Technically, what it causes is a redesign of an existing legal figure. That the withholding tax on income be applied in a different way. Which represents an obligation to “do”, which does not require a norm with a hierarchy of rights. It is sufficient that the executive, through any by-law hierarchical order, can implement this and order the taxpayer to fulfill this obligation to act otherwise. (OR)