- Brazil’s Senate approved a tax reform bill that could result in the world’s highest Value-Added Tax (VAT) if passed.
- The bill introduces a dual VAT system and replaces five current consumption taxes.
- Certain sectors such as fuels, hotels, events, education, and healthcare will benefit from reduced or zero VAT rates.
- The Brazilian Treasury Ministry’s initial estimate suggests a potential tax rate of up to 27.5% or even 28%.
- The constitutional amendment proposal does not establish a fixed VAT rate, leaving it to complementary legislation to determine.
- If the Treasury and Institute of Applied Economic Research’s scenarios hold true, Brazil’s VAT would surpass all other nations.
- Hungary currently charges the highest VAT rate at 27%, while Andorra has the lowest at 4.5%.
- The global average VAT rate is around 15%, with regional averages ranging from 12% in Asia to 20% in Europe.
- The US uses state and local sales taxes instead of a national VAT, with an average rate of 6.6% in 2020.
- The standard VAT rate for the European Union is 21%.
- The US Dollar (USD) is showing signs of strength against the Brazilian Real (BRL) in the forex market.
- The USD was trading at R$4.90 against the BRL, with potential for a short retracement to the 30-day exponential moving average at $4.97.
Source: finbold.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
