It is unquestionable that Brazil needs a Tax Reform, but the proposal must foresee a differentiated taxation regime for health goods and services. This is the premise of the Productive Sector of Health’s Manifesto on the Tax Reform, signed by ABIMED and seven other representative entities of the sector and delivered on April 5th to the Working Party that discusses the issue in the House of Representatives.

The document brings the position of the signatories before the proposals of amendments no. 45/2019 and no. 110/2019 to the Constitution, which concern the reform of the National Tax System. For the entities, differentiated taxation for the health sector must be seen as a priority, as it already occurs in almost all member countries of the Organization for Economic Cooperation and Development (OECD), according to the 2022 Consumption Tax Trendsreport, published in late 2022.

The health sector currently has a differentiated tax regime, due to its importance to society. Although the adoption of a single tax rate is a valid argument, the Manifesto notes that “it is fundamental to recognize the need to maintain the selective aspect of the tax,” after all, “the government is one of the most important consumers and one of the major beneficiaries of the tax exemption for the chain of medicines, medical devices, and health products. Brazil spends 9% of its GDP on healthcare, of which 40 to 45% is public spending. Increasing the tax burden on the sector is, to a large extent, making the government charge more of itself.”

ABIMED and other associations expect that the Manifesto sensitizes the government to the fact that the tax burden can bring serious risks, such as limiting access to treatment, generating insecurity in the population, increasing the difficulty of the inclusion of new technologies due to higher prices, besides making national products more expensive, thus making them less competitive.

For more information, read the full document