## Brazil: Tax Expenditure Rationalization Within Broader Tax Reform

_IMF Working Papers, September 24, 2021_

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## Bibliographic details
- Authors: Maria Delgado Coelho
- Published: September 24, 2021
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513596624.001

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### Key problem and context
- 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.

### Magnitude of tax expenditures
- Federal and subnational tax expenditures currently stand at over 5 percent of GDP.

### Feasibility and sequencing
- 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.

### Expected benefits of rationalization
- Could reduce resource misallocation.
- Could reduce income inequality.
- Could provide new revenues.

### Thematic focus areas (as indicated by subject and keywords)
- 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

*Source: Brazil: Tax Expenditure Rationalization Within Broader Tax Reform, IMF Working Paper No. 2021/240 (September 24, 2021).*

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_Source: https://www.imf.org/en/publications/wp/issues/2021/09/24/brazil-tax-expenditure-rationalization-within-broader-tax-reform-466179_