BRASILIA (Reuters) - Brazil’s government will send its tax reform proposals to Congress before the end of the year, a package of measures that will focus solely on federal taxes, federal revenue secretary Jose Barroso Tostes Neto said on Wednesday.
The simplification of Brazil’s complex tax system is seen as a key element of the government’s broader reform agenda designed to stimulate domestic and foreign investment, and ultimately boost economic growth.
Addressing a public hearing at the lower house’s finance and tax committee in Brasilia, Tostes Neto said the package of measures to be submitted to Congress will include uniting the current PIS and Cofins taxes into one.
It will not include a version of the controversial and unpopular “CPMF” financial transactions tax that was abolished in 2007, while state and municipal tax regimes will be added to the bill later, he said.
Tax on profits and dividends will also be addressed in the government’s wider reform of income tax, while corporate taxes will also be reduced, Tostes Neto said.
Tostes Neto also said that the government will “soon” propose an entirely new tax regime for startup companies across all sectors, including finance and digital banking services.
Citing preliminary figures, Tostes Neto told lawmakers that federal tax revenue in October was around 135 billion reais ($32.1 billion), and the accumulated take in the first ten months of the year was around 1.12 trillion reais, up 1.9% in real terms.
Reporting by Marcela Ayres; Writing by Jamie McGeever; Editing by David Gregorio