TAX EXEMPTION FOR THE BASIC FOOD BASKET AND TAX CASHBACK SYSTEM: AN ANALYSIS OF THE PRELIMINARY TEXT OF THE TAX REFORM AS RELATED TO FISCAL JUSTICE

uma análise do texto preliminar da reforma tributária sob a perspectiva da justiça fiscal

Abstract

Complex particularities of Brazilian tax structure contribute to various distortions, which lead to the maintenance of increased socioeconomic inequalities. The proposed tax reform appeared on the forefront of social and political debate during the year of 2023 (approved in the form of the same year’s Constitutional Amendment 132) and among key factors of the bill – submitted to Congress as PEC 45 –, lies the discussion about tax justice. Exemptions for products that make up the basic food basket and a direct restitution policy known as tribute cashback encompass a myriad of factors, from possible impacts on inequality to the maintenance of informal markets, marginal to taxation revenues. Pressure from the food industry and the use of tax selectiveness as a means of mitigating indirect tributes’ regressive nature are essential for assessing the possible distributive impacts of such exemptions.