Good morning! Today, we delve into the tax reform, which was approved in the House last night. What are its provisions, who are the winners and losers, and how Big Agro got its way.
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Tax reform clears House in historic votes
The word “historic” is sometimes thrown around lightly — but the Brazilian lower house’s two-round vote to approve the tax reform proposal last night was nothing short of historic. The bill received 382 yeas in the first round and 375 in the second — easily clearing the 308-vote threshold needed for a 60 percent majority.
Why it matters. Brazil’s tax legislation is a central element of the country’s gargantuan bureaucracy, which increases the cost of doing business in Brazil and scares off many foreign players. Complying with tax laws in Brazil is a surreal, punishing experience that requires an average of 1,500 hours per year (or 187 eight-hour workdays), according to 2019 World Bank data.
Key points of the tax reform:
Simplification. Several taxes — IPI (on manufactured goods), ISS...