Brazil’s Lower House Approves Landmark Consumption Tax Reform to Boost Economic Growth

• Brazil’s lower house approves major consumption tax overhaul
• The reform aims to boost the country’s potential growth
• The implementation depends on subsequent bills and a transition period
• Lawmakers voted well above the required votes to pass the bill
• The reform will be signed into law in a joint session of Congress next week
• It aims to simplify Brazil’s complex tax system and reduce compliance costs
• The proposal consolidates five existing levies into a value-added tax (VAT)
• The full implementation of the new taxes is expected in 2033
• It introduces a selective tax on harmful products
• Certain sectors were excluded from more advantageous tax schemes
• The tax base will shift from production to consumption over a 50-year transition period
• Various funds and compensation mechanisms are introduced for states.

Source: reuters.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.

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