BRASIL

Economy Minister Paulo Guedes announced on July 16 that the government’s economic team is finalizing a tax reform proposal, which is expected to be presented to Congress in the coming weeks. He also noted that the team is evaluating whether to include the creation of a tax on financial transactions in the proposal.

According to Guedes, the reform should reduce the amount of taxes being paid by workers, as a transaction tax will be introduced to replace these. Federal Revenue Secretary Marcos Cintra, also announced that there is consensus within the government to introduce a tax on financial transactions.

As with other proposals presented to Congress, the government’s idea is to create a Value Added Tax (VAT) unifying federal taxes and free up payrolls to reduce the cost of labor. Which will also impact on Income Tax..

The minister explained that “everything has a political calendar”, as, following the progress made on pension reform, the government now intends to present its proposal for tax reform to Congress.

According to Cintra, the formal presentation of the bill will be made in “a matter of a week or ten days”. The idea will be to formalize the proposal before the end of the parliamentary recess, commending on July 18 and ending on August 1. In addition to this proposal, there are two bills under consideration in both chambers of Congress.