Technological and structural challenges may hinder the implementation of split payments until 2027, as planned by the Federal Revenue Service. Members of the Management Committee believe the model is unlikely to be implemented even next year, as the agency will focus on other priorities for the time being.
Last Monday (April 6th), during the JOTA Tax Dialogues event, Secretary Pricilla Santana, from the Treasury of Rio Grande do Sul, and Giovanna Victer, from the Finance Department of Salvador, stated that the mechanism, considered essential for the full functioning of the VAT, should be left for a later stage.
The main barrier lies in the operational complexity. The model foresees the automatic segregation of the tax at the time of financial settlement, requiring large-scale integration between tax and financial systems. According to Santana, the expected volume of transactions could be up to 20 times greater than that recorded by Pix, which significantly increases the degree of difficulty.
Furthermore, there are structural limitations in the country. Regions with connectivity and energy infrastructure failures could be at a disadvantage, creating undesirable asymmetries in the new tax system. "We cannot implement a tool that works fully in large centers and leave remote areas behind," the secretary indicated.
“"This 'cake' needs to grow so that everyone can join in the fun and compensate for the prison credits," Victer added.
The development of the model involves collaboration between the Ministry of Finance, the Central Bank, states, municipalities, and the financial sector, including the Brazilian Federation of Banks (Febraban). Despite the progress in discussions, the understanding is that the country still lacks sufficient technological maturity to support operations on a national scale.
Another factor contributing to the delay is the prioritization of other aspects of the reform. The regulation of the IBS and CBS, the adaptation of tax systems, and the reorganization of tax administrations themselves have consumed the technical capacity of the federative entities.
Reform regulations
Despite uncertainties surrounding more complex instruments, the regulatory process for the new tax system is progressing. According to the managers, the regulations for the IBS and CBS are in the final stages of preparation and should be published by the end of April.
The initial text, containing approximately 600 articles, was discussed by a technical group comprised of representatives from states and municipalities, in coordination with the Ministry of Finance.
Mediation in the Steering Committee
Victer highlighted the need to create consensus mechanisms and mediation panels within the Management Committee, organized by theme, sector, or entity. These changes could "speed up voting processes and balance this council, which is, on the one hand, political in its mediation role and, on the other, technical in its operation." According to her, the expectation is that institutional and federative relations will be handled by the first vice-presidency of the body, currently held by the São Paulo Municipal Finance Secretary, Luis Felipe Vidal Arellano.
The representative from Rio Grande do Sul advised that the private sector should focus its efforts on creating and strengthening mediation spaces, instead of vying for influence in decision-making bodies. “More than fighting for space—because if you look at the partitioning rule and the various components, it involves many committees—they should seek a space to access the appeals system. Mediation serves to avoid litigation, not to keep appealing,” she stated.
The assessment is that these mechanisms can bring more legitimacy to the process and allow for more agile solutions to interpretative divergences, especially in an environment of transition to a completely new tax system.
Disputes over the Management Committee
Despite the inauguration of the first administration, tensions surrounding the creation of the Management Committee are expected to persist. According to Giovanna Victer, the history of disputes between municipalities, particularly between the National Confederation of Municipalities (CNM) and the National Front of Mayors (FNP), still influences the functioning of the committee.
According to the secretary, large cities resisted the reform until the final stages of the legislative process, while smaller municipalities accepted the new model after negotiations involving revenue sharing. This movement ended up guaranteeing greater political weight for small municipalities within the Committee.
Victer also highlighted a challenge to legitimacy: municipal representatives need to be accountable for a broad and heterogeneous universe of cities. "It's no use thinking that for every vote we'll have a convention of 5,500 municipalities via WhatsApp. We need to behave like delegates," he stated.
Source: www.jota.pro