Brazil's Tax Reform Could Boost Purchasing Power by 10% in 15 Years

According to Bernard Appy, Brazil's Secretary for Tax Reform, the new tax legislation is projected to increase Brazilians' purchasing power by an average of 10% over the next 15 years. This increase is attributed to the reform's positive impact on the country's economic growth. Appy stated that the tax reform could potentially increase Brazil's GDP by 10%. He noted that the positive effects will not be immediate due to the transition period but will become significant as the system simplifies and reduces tax evasion. The reform includes replacing cumulative taxes with two non-cumulative taxes, the Tax on Goods and Services (IBS) and the Contribution on Goods and Services (CBS), aligning with the international Value Added Tax (VAT) model. The dual VAT system is expected to simplify the current complexity and eliminate fiscal disputes between states, promoting fairer and more efficient revenue collection.