Tax technicians see dilution of the reform's impacts on airlines

Febrafite (National Association of State Tax Inspectors) states, in a statement released to the press, that the argument that the future combined rate of new taxes created by the Tax Reform, estimated at 28.5%, will imply an equal impact on air ticket prices is "fallacious."

For the entity, it is necessary to consider other factors in addition to the rate itself, such as non-cumulative (taxation technique applied to avoid the cascade effect), the broad use of credits and the gradual transition foreseen in the legislation, which extends until 2033.

In relation to the use of tax credits, according to the note, several situations that do not give credit under the system of old taxes, such as ICMS, will be given under the new tax rules of the reform, which could mitigate, in a certain way, the impacts.

Another point is that, for the entity, the impacts will be diluted over time, this is because the tax reform was created to begin in a phased manner. The IBS, for example, will start with a charge of just 10% in 2029, reaching its full form only in 2033. The CBS, in turn, begins with the effects from 2027. Despite this, the association estimates that it represents only a third of the total charge of the Dual VAT (the two taxes together).

"This means that the impacts of taxation will be diluted over time, allowing for a more gradual adaptation of the sector to the new taxation, and its eventual reevaluation if the supposed impacts touted are identified", says the note.

Source: CNN