The IBFD has received the draft reform plan of 17 September 1997, whose objectives are simplicity and generality. The plan reflects the technical approach of the Ministry of Finance and aims to reform the tax system, which is complex and obsolete, jeopardizes competitiveness and does not permit harmonization with other Mercosur member countries.
Highlights of the draft are:
- redistribution of public tasks among the different levels of government, but each level will maintain its current revenues;
- implementation of federal VAT and state excise and retail sales taxes;
- abolition of the federal excise tax (IPI), the states' ICMS and ISS, the federal social contribution (CS) and several social security charges (CONFINS and PIS/PASEP); and
- increase in the corporate income tax (IRPF) rate from 15% to 25% due to the abolition of CS.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
For further information contact Carlos S Romero, Deloitte Touche Tohmatsu, Sao Paulo, Brazil on Tel: +55 11 257 0122, Fax: +55 11 258 8456.
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