Brazil VAT breakthrough?

Brazil operates one of the most complex indirect tax regimes in the world. It has numerous levies, at federal, state and municipal levels. Many overlap, and lead to compounding taxes and act as a muffler on the progress of internal markets.

But is a breakthrough coming after 40 years of failure with a proposal from the federal government to adopt VAT in Brazil? This new plan is seeking to push through a federal-level only VAT reform. But its supporters are also calling to merge it with another, broader VAT implementation plan in play at the Chamber of Deputies. Together, these could overhaul probably the world’s most convoluted tax system, and provide a major boost to the struggling economy.