The Brazilian Chamber of Deputies will discuss a new tax proposal this week targeting the wealthiest individuals in the country.
If approved, it could generate R$ 20 billion ($3.95 billion) by 2024 and up to R$ 54 billion ($10.67 billion) by 2026. Since the 14th of this month, this bill has awaited urgent review.
Deputy Pedro Paulo from Rio de Janeiro oversees this proposal. He communicates with rural representatives about agro-industrial investment funds.
Specifically, he seeks to clarify the number of quota holders in these funds. Additionally, Paulo is determining how to structure the income tax on special funds.
He also aims to align tax rates for these funds with those for foreign investments.
Previously, the focus was on foreign investment taxes. However, Arthur Lira, the Chamber’s president, made a change.
He added measures that change how exclusive funds get taxed. This action resembles other recent legislative updates.
To increase its financial reserves, the government looks at tax adjustments. They sanctioned an increased limit for income tax exemption.
Their goal is to balance the budget by 2024 according to new fiscal rules.
Exclusive funds are unique investment tools. They need a starting investment of R$ 10 million ($1.98 million).
Additionally, they have a yearly fee of R$ 150,000 ($29,640). Roughly 2,500 Brazilians invest in these funds.
They hold assets worth R$ 756.8 billion ($149.58 billion), making up 12.3% of Brazil’s total funds. Now, they get taxed when withdrawn.
The government wants biannual deductions on these.
The proposal also examines foreign assets taxes. It plans to tax trusts where third parties manage investor assets.
Currently, assets abroad face taxes when they come back to Brazil. Estimates show Brazilians hold over R$ 1 trillion ($197.62 billion) abroad.
Summary of the Proposal
- Exclusive Funds: They face taxes upon withdrawal. The government wants twice-a-year deductions.
- Foreign Investments: They get a 15% tax on returns when coming back to Brazil. The proposal suggests annual taxes based on gains.
Trust taxation and function are in review. The aim is clearer tax payments and inheritance distributions. Currency profit adjustments and specific tax breaks are also being discussed.