LatinNews Daily - 22 July 2020

* Brazil’s economy minister, Paulo Guedes, has presented congress with the first part of the government’s proposed tax reform, which proposes the unification of two federal levies, the PIS/Pasep and Cofins, into a single new value-added tax with a rate of 12%, to be known as the contribution on goods and services (CBS). The president of the chamber of deputies, Rodrigo Maia, said there “is a lot of convergence” between the government’s proposal and two constitutional amendments for a tax reform, the PEC 45/19 and PEC 110/19, currently under discussion in the chamber and the senate, respectively. This first stage of the government’s proposal does not include a tax on digital transactions (favoured by Guedes but opposed in congress), or changes to taxes on dividends or income tax – issues which the government plans to treat in separate proposals – nor does it concern taxes levied by states and municipalities. While there is a consensus on the need to simplify Brazil’s complex tax system, and to introduce a single value-added tax, the details of such a reform remain the subject of much discussion.    

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