Economy Minister Paulo Guedes defended changes to the country’s income tax system. Mr. Guedes proposed taxing corporate dividends (which are currently tax-free), while lowering corporate income tax rates from 34 to 30 percent.
“This is what Brazil needs to receive investments from abroad,” he said on Monday. The minister argued that the move would be important for the country to accede to the Organization for Economic Cooperation and Development (OECD).
It is hard to take the proposal seriously. Changing the tax code would require a heavy dose of political negotiations — a goal nearly impossible in an electoral year.