As we all know, and some refuse to believe, billionaires are evil. Nobody reaches that level of wealth without using and abusing the people who work for them and breaking a few laws(and in a world where millions have nothing to eat, drink or a house to live in, accumulating that much wealth on themselves instead of letting it actually trickle down makes them even worse).
However, the Brazilian Senate Economic Affairs Committee approved recently the bill to tax offshore companies—businesses owned by Brazilians located in tax havens—and the funds of the super-rich(The text now advances to the plenary, but there is no set date for the vote), which may force those with too much to finally pay their fair share. At least here.
What happened?
The rapporteur, Senator Alessandro Vieira (from political party MDB-SE), made no substantive changes to the bill. In other words, the approved opinion is nearly identical to the text approved by the deputies.
Vieira only accepted editorial amendments, including with the government’s approval. He incorporated one of these changes into the report, even after the symbolic vote on the base text, in agreement with the party blocs. As a result, if approved in the plenary, the bill does not need to return for a new analysis in the Chamber, going directly to presidential sanction. The government is eager to approve the text, as it is one of the priorities of the economic team.
The party blocs are dissatisfied with the Planalto Palace, which is working to improve relations with senators after suffering significant defeats in the House. The general idea is that the Executive does not have a sufficient allied base to approve proposals solely in the government’s interest, only projects of national or economic scope.
The proposal was approved in the Chamber on October 25, after President Lula (PT) appointed economist Carlos Antônio Vieira Fernandes, an ally of the President of the Chamber, Arthur Lira (PP-AL), to the presidency of Caixa Econômica Federal(state-owned Brazilian financial services company and bank). The project’s analysis was stalled due to the government’s delay in making room for the centrão in the administration.
What does the bill say?
Under the current rule, the income tax on high-income individuals’ investment funds is collected upon the withdrawal of the invested amount.
The tax rate imposed on investors who update the earnings obtained abroad in the funds of the super-rich and offshore accounts will be 8%. The measure was included in the Chamber at the request of the Treasury, which advances the possibility of starting the update of fund earnings from May 2024 to December 2023.
The text establishes a minimum of 100 shareholders for the formation of Fiagro (Funds for Investment in Agroindustrial Production Chains) and REITs (Real Estate Investment Funds). The proposal was a compromise between the Ministry of Finance and the ruralists.
Furthermore, it limited the percentage of shares for second-degree family members in the fund to 30%. The income tax will be 15% on financial investments, profits, and dividends from the super-rich funds abroad and offshore accounts.
In the approved bill, the taxation of super-rich funds will occur twice a year, in May and November, as with other funds (the so-called “come-cotas”). The taxation of offshore accounts will occur annually on December 31st.
