Today, Brazil’s tax reform hopes go up in smoke. Former Health Minister evades inquiry deposition, fearing arrest. Nelson Teich next up in the Senate hearings committee.
Speaker makes U-turn on tax reform
In our Q1 Report (available here), we said Brazil’s long-awaited tax reform was “unlikely to make any short-term progress during the pandemic.” Events on Tuesday proved us right and showed the massive challenges which face any consequential and effective reform, in a Congress marred by a lack of government guidance and during a political crisis.
- Just days after saying he would make tax reform a priority of his tenure as Speaker, Congressman Arthur Lira dissolved a joint congressional committee tasked with analyzing the multiple proposals and combining them into a single bill.
What happened. The decision came after reform rapporteur Aguinaldo Ribeiro submitted his proposal to the House — which included merging multiple levies at federal, state, and municipal levels into a single goods and services tax named IBS.
- But the move goes against the government’s wishes, which are to slice the reform into several steps, approving one at a time. The Jair Bolsonaro administration had planned to focus on federal taxes only at first, which they...