Proposed 20% National Rate to Replace Provincial Tax, Suggests 11% Provincial VAT

The analysis suggests a national tax rate of 20 percent to eliminate the main provincial tax, proposing an 11 percent provincial VAT to replace the Ingresos Brutos tax, which should collect 4 percent of GDP. The national VAT currently generates revenue equivalent to 7 percent of GDP, and the estimated provincial VAT rate is around 11.4 percent, though it could drop to 10.9 percent with collection advances, resulting in a total indirect tax burden for consumers of 30.9 to 31.4 percent. However, most jurisdictions lack the capacity to administer the VAT effectively.

Source: ambito.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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