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Brazil ponders VAT implementation

  • 23 November 2018 | Richard Asquith

Brazil ponders VAT implementation

Brazil’s new President-elect, Jair Bolsonaro, has said he is considering introducing a Value Added Tax (VAT) in a bid to streamline the existing ICMS, ICI and other complex indirect taxes. This follows a review launched earlier this year by the Brazilian Congress to implement VAT. The in-coming government is considering a national-level VAT in a move that would replicate the relative recent success of India consolidating its multitude of consumption taxes into a single Goods and Services Tax. There will also be a review of a wide-ranging financial services tax.

Brazil is commonly cited has having the most convoluted indirect tax regime in the world. At the Federal level, there is PIS, ICMS, CONFINS and others levies. States and city-level municipalities also charge local ISS and supplementary taxes. The range of taxes are rendered highly time-consuming because of the inconsistencies in local returns, particularly for ICMS and ISS. Companies in Brazil spend on average 2,038 hours to comply with the various charges, or about 12 times the average in the wealthy OECD group of nations, according to the World Bank’s “Doing Business” index. 

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VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which this year won International Tax Review's Tax Technology Firm of the Year. Richard qualified as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.