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Brazilian Chamber of Deputies Timid tax reform approved

Brazilian Chamber of Deputies: Timid tax reform approved

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On September 2, 2021, the “ABC Internacionales” website published the timid tax reform approved by the Chamber of Deputies of Brazil. Let’s see what it consists of:

1. Tax regime reform

On September 2 of this year, the Chamber of Deputies approved tax reform and sent it to the Senate for its approval. The votes in favor of the reform were 398 and 77 against, which consists in taxing 15% of the profits from dividends, exempted in the country for many years (1995).

2. Initial proposal

The initial proposal established a 20% taxation on dividend profits, but this rate was reduced by 5 percentage points after a debate in the Lower House.

 Although the Minister of Economy pointed out that the 15% tax will put an end to certain tax privileges and will help reduce taxation for companies and workers.

3. Disclaimer

However, the bill approved by the Chamber of Deputies provides that taxes paid by companies on their income will drop from the current 15% to 8% as compensation.

4. Impact on workers

As for workers, it raises the minimum taxable wage to 2,500 reais, being currently 1,900 reais.

 Currently, the bill will be sent to the Senate, which is assessing an initiative for more far-reaching tax reform.

Source: Abc.com 03/09/21

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