Bolsonaro Says Government Will Not Introduce New Taxes in Brazil

RIO DE JANEIRO, BRAZIL – President Jair Bolsonaro said on Friday, July 19th, that the Brazilian government will not introduce new taxes and that the Provisional Contribution on Financial Transactions (CPMF) would not be resurrected. He delivered the statement at breakfast with journalists from international news agencies at the Palácio do Planalto.

“We will not introduce any new taxes. The [tax] reform that is being processed there is Parliament’s, not ours. As explained at the last meeting of ministers, we wish to carry out a tax reform and deal with federal taxes only. Throughout my 28 years as a deputy, they have wanted to achieve a reform involving the federal government, states, and municipalities. It doesn’t work,” he said.

According to him, the economic team of Minister Paulo Guedes is set on exclusively analyzing federal taxes. “We want to simplify federal taxes and not introduce any new taxes. Several taxes may be merged, and I think that’s what’s is going to happen. The Financial Transaction Tax (CPMF) will not return.”

Currently, there are two tax reform proposals under discussion in Congress. In the Chamber of Deputies, the special committee to discuss the reform submitted by deputy Whale Rossi was established last week. In parallel, the Senate introduced a proposal to amend the Constitution (PEC) based on a text that has been under discussion in the Chamber since 2004.

Developed by economist Bernard Appy, the Chamber’s proposal merges taxes on production and consumption collected by the federal, state, and municipal governments and sets another tax on specific goods and services, the revenue from which will be exclusively retained by the federal government.

The Senate’s proposal introduces a value-added tax under state jurisdiction, called the Tax on Transactions in Goods and Services (IBS), and the Excise Tax on specific goods and services under federal jurisdiction.