At an event, vice president states that interest rates are “high”, but that the curve is falling and that reform should help
The vice-president and minister of Development, Industry, Commerce and Services, Geraldo Alckmin (PSB), stated this Thursday (5.Oct.2023) that Brazil’s exchange rate is “good” It is “competitive” with the dollar around R$5.10.
“We need to act on the cause of the problems: have an agenda of competitiveness, productivity, so that we can recover stronger and more sustainable economic growth. The exchange rate is good, around R$5, R$5.10. It’s a competitive exchange rate”declared during participation in the 42nd National Foreign Trade Meetingin Rio de Janeiro.
However, despite praise for the dollar’s level, Alckmin made new criticisms of the interest rates charged in Brazil, which he classified as “elevated”. But he highlighted that the rate is trending downward.
He added that the country’s tax burden is high, but that tax reform will help reduce it. “The industry is overtaxed and the VAT model will completely relieve investments and completely relieve exports”stated Alckmin.
The vice president also mentioned as part of the “competitiveness agenda” of the president’s government Luiz Inácio Lula da Silva (PT) the recovery of the market in Latin America, citing the possible agreement between Mercosur (Southern Common Market) and the European Union and another treaty between the bloc and India.
TAX REFORM
The PEC (Proposed Amendment to the Constitution) 45/2019, which deals with tax reform, is currently being processed in the Federal Senate. It was approved in the Chamber of Deputies on July 6th.
The main point of the reform is the tax unification in the federal, state and municipal scenarios.
Currently, the country has 5 taxes that apply to products purchased by the population:
- IPI (Tax on Industrialized Products);
- PIS (Social Integration Program);
- Cofins (Contribution for Social Security Financing);
- ICMS (Tax on Circulation of Goods and Services); It is
- ISS (Service Tax).
The proposal is simplify them into dual VAT for goods and serviceswith federal taxation, which would unify IPI, PIS and Cofins, and another state/municipal taxation, which would unify ICMS and ISS.
Understand the main tax points here.
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