Bill no. 3,887/2020 sent by the Federal Government to the National Congress foresees the implementation of the Tax Reform in phases, and it is certain that in this first moment, it was proposed the merger of PIS/PASEP and COFINS into a single tax called Contribution on Goods and Services – CBS, whose rate will be 12%.

According to the aforementioned Bill, the main objectives of this first phase are:

• end differentiated taxation for various sectors and hundreds of special regimes;

• increase transparency, since the CBS will be levied only on gross revenue (and no longer on all revenue);

• end cumulative tax collection, since every stage in the production chain will have the right to a tax credit;

• to standardize tax incidence, since the CBS will apply to both goods and services;

• reduce the complexity of the legislation, among others.

However, this change ends up increasing the tax burden on companies, and it is certain that the service sector will suffer the most, since it does not have an extensive production chain and inputs, which makes it impossible to obtain tax credits.

In addition, there is a discussion about the eventual reduction of tax collection by banks, since the CBS foresees a differentiated tax rate of 5.8% for financial institutions (remaining in the cumulative regime).

Finally, it is important to clarify that the CBS will not cause changes for legal entities opting for Simples Nacional.