The Culture Ministry has apparently succeeded in lobbying Congress to include guarantees for state investment in the tax reform currently going through the committee stage. Deputy Virgílio Guimarães (PT, Minas Gerais), rapporteur for the bill, has now produced his second report without altering any of the clauses in the first that could affect the communications sector but including the above-mentioned guarantees, as predicted by Pay-TV News.
The report recommends that a new paragraph be added to article 216 of the Federal Constitution, which deals with cultural protection and incentives. It would read as follows: ?States and the Federal District shall be authorized to set up a State Fund for the Promotion of Culture and earmark up to five-tenths of one percent of their tax receipts for the funding of cultural programs and projects, but may not use such funds for the payment of: I – payroll expenses; II – debt service; or III – any other current expense not directly related to the investments or activities in question.? Thus the door is open for states to invest 0.5% of sales tax (ICSM) receipts in cultural projects.