Segue outro artigo publicado para o site. Por favor, inclua: Originally published in the July 23 edition of World Tax Daily (Copyrights Tax Analysts – www.taxanalysts.com)
Brazil’s Council for Economic and Social Development (Conselho de Desenvolvimento Econômico e Social, or CDES)(1) on July 17 submitted a proposal to President Luiz Inácio Lula da Silva recommending that the government legally limit the country’s maximum tax burden, particularly as it applies to corporate taxpayers.
The CDES suggested that the tax burden be limited to a maximum of 26 percent of Brazil’s GDP, and proposed a gradual reduction of the 0.38 percent bank transactions tax (CPMF).
With the exception of the CPMF, the proposal did not list any specific taxes, but among the most burdensome are the 7.6 percent COFINS (Contribution for the Financing of Social Security) and the 1.65 percent P.I.S. (Program for Social Integration contribution) on corporate taxpayers’ gross income.
The CDES’s suggestions come at a time when the executive branch is reviewing a tax reform proposal that likely will be submitted to Congress within the next two months. During his July 17 meeting with the CDES, Lula da Silva confirmed that the new tax reform package soon will be sent to Congress, but he did not say whether the proposal will include the CDES’s two main tax suggestions. Skeptics say it is unlikely that the suggestions will be adopted, given earlier statements by Finance Minister Guido Mantega.
The government says the new tax reform should be neutral in terms of the tax burden, meaning that there should be no increase or decrease from the current level, which Mantega estimated at 34.5 percent of GDP in 2006.
However, critics at the CDES argue that the government’s use of the 2006 tax burden as a benchmark is wrong and misleading because the 2006 figure was excessive. (The country’s tax burden in 2002 was 32.19 percent of GDP.) They also claim that the overall tax burden in the first quarter of 2007 reached 37.3 percent of GDP, although they did not disclose the source for that figure.
CDES member Antoninho Trevisan complained that Brazil’s current tax burden impairs the country’s growth. He said that by limiting the overall tax burden to 26 percent of GDP, Brazil would have a tax burden similar to other emerging countries that compete with Brazil in world markets.
(1) The CDES is an advisory board to the Brazilian president created in 2003, just after President Luiz Inácio Lula da Silva took his first term in office. It has 102 members, 90 from the private sector. Each member is appointed by the president for a term of two years.
David Roberto R. Soares da Silva