Fux defends tax reform, but believes in judicialization

The minister of the STF (Federal Supreme Court) Luiz Fux defended this Friday (10) the tax reform and legal security combined with predictability for management and governance, but believes that it will be judicialized and criticized excesses that he called a “legislative orgy taxation” and high litigiousness in the courts in matters related to contributions.

Fux spoke at a meeting of Sescon, the Union of Accounting and Advisory Companies in São Paulo. The theme of the meeting was “Taxation, Economy and Politics: synergy in building convergences for governance in 2023”.

On tax reform, the minister understands that parliament is divided, that there are interesting proposals in relation to tax reduction, but he guarantees that, despite being “very good, it will be judicialized” and that it must be done quickly so that we are not left “to always on the margins of ourselves”.

Fux commented that “the union itself does not produce anything, except tables, chairs and people sitting, but States and Municipalities produce. The Union has to keep 20% of what it collects and the States with 80%”.

For Fux, it is the duty of the judiciary to guarantee the right acquired in past decisions to avoid an “absurd systemic risk”. He compared that the litigation rate between companies in Brazil is 96%, while in the US it is 2%.

The minister defended the intensification of consensus to avoid lawsuits, measures to standardize decisions in similar cases and stable jurisprudence.

Fux also said that he lived “a nightmare” when commenting on his decision, published this Thursday (9), on the suspension of the change in the ICMS calculation base that is levied on electricity. The measure had been approved by Congress last year.

He assesses that the Union extrapolated its jurisdiction over the tax due to the States and that, such a decision, could cause a drop in revenues of R$16 billion within a period of six months.