Senate committee postpones tax reform vote. Again.

The Senate’s Constitution and Justice Committee postponed, for a second time this year, a vote on a tax reform proposal. The final draft of the bill was met with resistance by the Brazilian Democratic Movement (MDB) party, which has the largest bench in the Senate. The vote was rescheduled for next week, March 23.

The committee’s chair, Davi Alcolumbre, said that only the core text will be analyzed at first, with peripheral points to be addressed at a later time.

The proposal to amend the Constitution — one of four tax reform-related bills in Congress — would involve creating new goods and services taxes, one for municipalities (IBS), and another federal and state levy (CBS). Together, these would replace nine different taxes and would take some 40 years to be fully implemented into Brazilian law.

During this Wednesday’s meeting, senators from the MDB and União Brasil parties requested more talks with Roberto Rocha, the bill’s rapporteur. “A week is nothing compared to 20 years of debate, of a discussion on such an important subject as this,” said congresswoman Simone Tebet. She said the House is “close to constructing a consensual draft.”

Earlier this morning, Roberto Rocha published a new version of his report, adopting amendments to the text. In one of those amendments, Mr. Rocha introduced the possibility for Brazil’s low-income population to refund the amount spent on goods and services tax. After the vote in the committee, the proposal will get to a Senate floor vote, where it needs the approval of 49 out of 81 senators.

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