Brazil: Tax Expenditure Rationalization Within Broader Tax Reform

September 24, 2021

Preview Citation

Format: Chicago

Maria Delgado Coelho. Brazil: Tax Expenditure Rationalization Within Broader Tax Reform, (USA: International Monetary Fund, 2021) accessed December 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

The excessive complexity and burden of the Brazilian tax system, riddled by cumulative indirect taxes and heavy payroll contributions, have led to an accumulation of fiscal incentives aimed at reducing its burden on taxpayers and productive activities. Federal and subnational tax expenditures currently stand at over 5 percent of GDP. Rationalizing them can only be comprehensively feasible in the context of a broader sequenced tax reform, and could reduce resource misallocation and income inequality, as well as provide new revenues.

Subject: Corporate income tax, Personal income tax, Public financial management (PFM), Social security contributions, Tax expenditures, Tax incentives, Taxes

Keywords: Corporate income tax, Cost of capital, Global, Labor tax wedge, Personal income tax, Rationalization experience, Sequenced tax reform, Single tax, Social security contributions, Tax expenditures, Tax incentives, Tax relief, Zero rating

Publication Details

Pages:

46
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2021/240
Stock No:

WPIEA2021240
ISBN:

9781513596624
ISSN:

1018-5941

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