On July 21 the Brazilian government sent to its Congress the first stage of its proposed tax reform. The proposal includes unifying two levies on consumption, the so-called PIS and COFIN taxes, into a 12% value-added tax (VAT).
Brazil has one of the world’s most complex tax systems. According to the World Bank while a typical business spends 234 hours to fulfill its tax obligations, a Brazilian company faces 1,500 hours. Brazil’s fiscal system is characterized by opaque regulations and constantly shifting rules across federal, state, and municipal levels. Overhauling the tax system would create efficiencies for companies and help promote private investment.