On August 5, the Joint Committee of Congress resumed its study of the Tax Reform, a session attended by Economy Minister Paulo Guedes, who announced that the government will provide more details about its proposal in the next few days. He added that the Executive Branch does not propose to increase taxpayer burden although he did not rule out the possibility of including digital tax in the next round of proposals. Access Guedes’s presentation by clicking here. 

The legislators met with Paulo Guedes to resume their analysis of the three tax reform proposals that are currently being treated in Congress. During the meeting, several legislators questioned the Executive Branch’s decision to send its proposal in stages. Guedes answered that due to the pandemic, the government had not had enough time to elaborate all the points of the reform and was for the time being only proposing to create a tax on Goods and Services (see bill here).

According to Paulo Guedes, the current tax system in Brazil “is perverse, regressive and inefficient.” He said: “Let’s not raise taxes. People already pay too many taxes … our program is about simplification and reduction. The burden may be the same, but we will substitute and reduce the number of taxes,” he said, adding that the government will send more proposals in the coming days, and did not rule out the possibility of introducing a digital tax. 

Certain legislators, such as Senator Eliziane Gama (Ciudadanía – opposition) and Deputies Afonso Florence (PT – opposition) and Marcelo Freixo (PSOL – opposition) advocated a “bolder and more progressive” reform, focused on a wealth tax.

It is worth recalling that in addition to the proposal presented by the government, two draft amendments on this subject are pending: 45/2019 by Deputies and 110/2019 by the Senate. The idea of the legislators is that work in committee will help to achieve a single tax reform proposal.