{
  "title": "Brazil: Tax Expenditure Rationalization Within Broader Tax Reform",
  "publication": "IMF Working Papers, September 24, 2021",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2021/09/24/brazil-tax-expenditure-rationalization-within-broader-tax-reform-466179",
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  "summary": "The excessive complexity and burden of the Brazilian tax system, riddled by cumulative indirect taxes and heavy payroll contributions, have led to an accumulation of fiscal incentives aimed at reducing its burden on taxpayers and productive activities.",
  "sections": [
    {
      "heading": "Key problem and context",
      "content": "- The Brazilian tax system is characterized by excessive complexity and burden, marked by cumulative indirect taxes and heavy payroll contributions.\n- This complexity has led to an accumulation of fiscal incentives aimed at reducing tax burdens on taxpayers and productive activities."
    },
    {
      "heading": "Magnitude of tax expenditures",
      "content": "- Federal and subnational tax expenditures currently stand at over 5 percent of GDP."
    },
    {
      "heading": "Feasibility and sequencing",
      "content": "- Rationalizing tax expenditures can only be comprehensively feasible within the context of a broader sequenced tax reform.\n- Standalone measures to cut or reform tax expenditures are implied to be insufficient without accompanying broader tax system changes."
    },
    {
      "heading": "Expected benefits of rationalization",
      "content": "- Could reduce resource misallocation.\n- Could reduce income inequality.\n- Could provide new revenues."
    },
    {
      "heading": "Thematic focus areas (as indicated by subject and keywords)",
      "content": "- Corporate income tax\n- Personal income tax\n- Public financial management (PFM)\n- Social security contributions\n- Tax expenditures and tax incentives\n- Labor tax wedge and cost of capital\n- Sequenced tax reform and single tax considerations\n\nSource: Brazil: Tax Expenditure Rationalization Within Broader Tax Reform, IMF Working Paper No. 2021/240 (September 24, 2021).\n\n---\n\n Content in this bundle\n\n- Working Paper\n  - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2021/09/24/brazil-tax-expenditure-rationalization-within-broader-tax-reform-466179"
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    "Authors: Maria Delgado Coelho",
    "Published: September 24, 2021",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781513596624.001",
    "The Brazilian tax system is characterized by excessive complexity and burden, marked by cumulative indirect taxes and heavy payroll contributions.",
    "This complexity has led to an accumulation of fiscal incentives aimed at reducing tax burdens on taxpayers and productive activities.",
    "Federal and subnational tax expenditures currently stand at over 5 percent of GDP.",
    "Rationalizing tax expenditures can only be comprehensively feasible within the context of a broader sequenced tax reform.",
    "Standalone measures to cut or reform tax expenditures are implied to be insufficient without accompanying broader tax system changes.",
    "Could reduce resource misallocation.",
    "Could reduce income inequality.",
    "Could provide new revenues.",
    "Corporate income tax",
    "Personal income tax",
    "Public financial management (PFM)",
    "Social security contributions",
    "Tax expenditures and tax incentives",
    "Labor tax wedge and cost of capital",
    "Sequenced tax reform and single tax considerations",
    "**Working Paper**"
  ],
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