Brazilian Government Said to Want Reduction of Maximum Income Tax Rate
RIO DE JANEIRO, BRAZIL – The main agenda item of President Bolsonaro’s government so far is the Social Welfare reform. Once approved, the economic team relies on tax reform.
Among the points currently being studied by the government is a reduction of the maximum personal income tax rate, from the current 27.5 percent to 25 percent, and for companies, from 34 percent to 25 percent.
The information is from the newspaper Folha de S.Paulo.
Income tax changes should be proposed in August. Before that, according to the report, the government will propose the merger of five consumption taxes (PIS, Cofins, IPI, CSLL, and IOF) into a single federal tax, having a rate of 15 percent.
Still according to the publication, the special secretary of Treasury, Marcos Cintra, has been examining how to lower the percentage rate for income tax.
One of the alternatives is to transfer the CSLL (a corporate income tax) to the Tax on Payments (IP), a new tax to be levied on any financial transaction.
The report has had access to the content of minutes of a meeting on the reform that took place last week, in the Ministry of Economy.
According to the study, the team relies on public opinion to support the reform, which has the potential to become more popular than the Social Welfare reform.
At the meeting, Cintra may have defended the position that “social welfare reform is fundamental for the country’s solvency,” but that the tax will be of more interest to the population, because “it impacts everyone’s pockets.”
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