In tax circles, Brazil is notorious for its complex tax system. You could compare it to the vast, dense, often impenetrable rain forests that dominate its interior, full of assorted critters and creepy-crawlies ready to bite you at the first opportunity. Indeed, Brazil’s tax code is so vast, it’s probably home to a lost tribe or two.
The good news for taxpayers is that several candidates for the Brazilian presidency, to be decided on October 7, 2018, are proposing to reform indirect taxation, an area of the tax regime particularly noted for its mind-boggling complexity, with a more widely understood system of value-added tax. The bad news is that sales tax in Brazil has also proven to be stubbornly resistant to reform. And this is only one aspect of a tax regime which, akin to an expedition in the country’s huge … Read More »
Some things in the world of tax seem to never change however. Particularly governments’ apparent fixation with tax amnesties. Brazil is the latest in a long list of jurisdictions that have announced an amnesty-related development of one sort or another recently. In Brazil’s case, it has decided to extend the deadline for its latest disclosure scheme by one month to September 29.
The success or otherwise of an amnesty is likely to depend hugely on its terms and conditions – too much stick and taxpayers might stay below the radar, too much carrot and the rule of law could be undermined. Still, I don’t remember seeing too many headlines recently proclaiming that a disclosure scheme has been a roaring success. Indeed, the word “flop” is more readily used to describe the outcome of a tax amnesty. And notable flops have been reported in … Read More »
The John Cleese award, for “stating the bleedin’ obvious,” goes to the International Monetary Fund this week, for advising Brazil that it – and its taxpayers – would benefit from a simpler tax regime.
Of course, those who follow international tax developments are likely to be well aware that Brazil has one of the most complex tax regimes in the world for businesses. But for those who aren’t in the know, let me apprise you of some of the grizzly details.
Brazil routinely props up PwC’s “Paying Taxes” time-to-comply league table, and last year it took the average medium-sized firm more than 2,000 hours to complete its tax compliance obligations. And that actually represented a considerable improvement over the previous year, when PwC put the figure at 2,600 hours.
But what makes Brazil’s tax system so nightmarish, when multinational companies are accustomed to tax … Read More »
I’m no climate change “denier” (a term I despise incidentally, with all its unpleasant overtones), but I’m not totally convinced that it’s happening either. As I’ve alluded to before in this column, at the same time, I also happen to think that the world would be an infinitely better, healthier place if we stopped burning fossil fuels and switched to cleaner alternatives. I realize that we are undergoing something of a transition towards that end all over the world, and that it’s not going to be completed overnight, or probably within my lifetime, but I would argue that governments are making a bit of dog’s breakfast out it. The United States managed to send men to the moon with less computing power than is available in your smart phone, and that’s because they spent billions of dollars on the Apollo … Read More »