Federal government may lose R$500bn in cases linked to tax issues

Nine tax issues discussed in lawsuits in both the Federal Supreme Court (STF) and the Superior Court of Justice could together amount to R$500 billion in losses for the federal government if it is defeated in all of them. The case with the greatest impact on public coffers — estimated at R$250 billion — will define if sales tax ICMS is included in the calculation basis of social contributions PIS and Cofins. The case has not yet begun to be tried in the STF. Other pending issues are the definition of an input to obtain PIS and Cofins credits, valued at R$50 billion, and the possibility of collecting PIS and Cofins on revenues from financial institutions, which may reach almost R$136 billion. There is also expectation that the courts will review the right of a credit related to the Tax on Industrialized Products (IPI) in the acquisition of exempt inputs from the Manaus Free Trade Zone.