Good morning! Today: the government’s tax reform woes, pro-Bolsonaro demonstrations bring about fears of police mutinies, Brazil’s economy leads the way in Latin American recovery, São Paulo fire destroys the region’s last piece of tropical savanna.
Tax reform headache set to continue
The government made a final push to rally support for the tax reform bill. While the proposal could go to a vote today, uncertainty remains. Two previous voting attempts were postponed, precisely due to a lack of support for approval.
Why it matters. Economy Minister Paulo Guedes advertised the reform as a pro-business move that would spark investors’ trust in Brazil. But the proposal fails to simplify the tax code and some experts say it does nothing to reduce the tax burden.
Key points. The reform establishes a 20-percent tax on dividends, but also dramatically reduces corporate income tax rates.
Opposition. Business sectors oppose the taxation of dividends. Catering to their interests, lawmakers changed the bill to increase tax breaks elsewhere.
- That, however, sparked a reaction from state governors, who fear municipalities and states will be stripped of BRL 14 billion (USD 2.6 billion) in revenue.
- State finance secretaries want to hold a meeting with Mr. Guedes...