BRAZIL

On May 4, the Temporary Joint Committee on Tax Reform held a meeting today. At the session, the Committee’s Rapporteur, Aginaldo Ribeiro (PP), presented the initial report that will be discussed in the committee. Legislators will be able to send amendments to the report until Friday. From that date, the rapporteur will have three days to evaluate them and decide whether or not to incorporate the changes in the text to be studied.

Among the highlights of the proposal is the simplification of the tax system. The bill seeks to unify five taxes (PIS, Cofins, IPI, ICMS and ISS) into one. This tax would be called Goods and Services Tax (IBS, in Portuguese). According to the Rapporteur, the transition of the tax system will take place over a period of six years, in which the current taxes will be progressively reiterated.

On the other hand, it should be noted that the report does not set a rate for the new IBS. The value of this tax would be determined throughout the implementation process of the potential law.