On May 20, President Jair Bolsonaro said he intends to present a Tax Reform Bill for the country after the approval of the Social Security reform. He explained that the reform is necessary to enable other projects for the country.
According to the President, “the new Social Security is Brazil’s gateway to progress. In addition, this approval will make feasible several other economic actions that will benefit the country, such as the Tax Reform, which we intend to present soon after the Social Security Reform is approved, as we understand that this is an urgent desire of the Brazilian people.”
The text of the tax reform (PEC 45/19), which is already pending, creates the Tax on Operations with Goods and Services (IBS), which replaces three federal taxes – IPI, PIS and Cofins -, ICMS, which is state, and ISS, which is municipal. These are all levied on consumption. IBS will be composed of three rates – federal, state and municipal. Furthermore, the Federal, state and local governments will be allowed to set different amounts for the tax rate.