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Brazil: Tax Expenditure Rationalization Within Broader Tax Reform
Author:
Maria Delgado Coelho
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Series:
IMF Working Papers
Volume/Issue:
Volume 2021: Issue 240
Language:
English
Publication Date:
24 Sep 2021
DOI:
https://doi.org/10.5089/9781513596624.001
ISBN:
9781513596624
ISSN:
1018-5941
Pages:
46
Keywords:
rationalization experience; Labor tax wedge; sequenced tax reform; cost of capital; zero rating; tax relief; single tax; Tax expenditures; Corporate income tax; Tax incentives; Personal income tax; Social security contributions; Global
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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.
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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.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund