Sanctioned this Thursday (16) with technical vetoes, the complementary law that regulates the consumption tax reform will bring significant advances in the medium term, said the Minister of Finance, Fernando Haddad. At the law signing ceremony, he highlighted that Brazil has the seventh worst tax system in the world and that the changes will bring more competitiveness to the Brazilian economy.
“THE [senador] Edward [Braga] and the [deputado] Reginald [Lopes] They were very happy to highlight the extraordinary advances that the revolution in the Brazilian tax system will bring to the entire population in the medium term. In 2027, Brazil begins to change and I would say that many companies that doubted the possibility of this reform are starting to look at Brazil more seriously”, declared Haddad.
The minister highlighted the most recent edition of the World Bank report, which places the current Brazilian tax system in position 184, among 190 countries. “There are only six countries with a tax system worse than Brazil’s. This is an obstacle to Brazilian development”, stated the minister.
According to Haddad, the new tax system, which reduces bureaucracy and centralizes collection through Value Added Tax (VAT), will allow companies to invest more in modernization and employee training than in tax planning (loopholes in the law that reduce tax payments).
“It is not possible to advance the economy with this tax system, especially because the competitiveness between companies [no sistema atual] it is much more focused on the dispute between tax planning than on innovation, technical capacity, the purchase of new machines, the training of its staff, the education of the Brazilian people”, he said.
The minister highlighted that advances in tax reform will be felt slowly, because there will be a transition from current taxes on consumption to VAT that begins in 2026 and ends in 2032. Haddad compared the progress of the new tax system to that of achievements when he was minister of Education, with policies that were consolidated years after his administration, with the University for All Program (ProUni), Student Financing (Fies), the creation of federal universities and federal educational institutes and open universities.
“I look at this reform with the same feeling. The change will not be noticeable tomorrow or the day after tomorrow. But I am sure that this is the greatest legacy of the economy that the government will deliver to the Brazilian population”, he declared.
When praising the work of the extraordinary secretary of Tax Reform, Bernard Appy, Haddad cited the immense work of putting together a new federative pact. “Imagine you making a federative pact with 5,570 mayors, with 27 governors, with all the sectors involved, because this affected the entire Brazilian economy, and reaching an understanding to vote on a constitutional amendment and a complementary law. This is a task of a generation”, added the minister.
