Tax Revenues Continue Growing in Brazil
December 24, 2013 Taxation in Brazil
RIO DE JANEIRO – Overall tax collections are on the rise in Brazil, but the growth is coming at the unintended cost of increased complexity for taxpayers.
Late last week the Federal Revenue Secretariat issued a new statement showing that the tax-to-GDP ratio in the country has risen for the third consecutive year in a row, reaching 35.85 percent in 2012, up by 0.54 percent compared to the previous year.
In real terms, the tax revenues for the year were approximately BRL 1.57 trillion, compared to a total GDP of BRL 4.38 trillion.
According to the Federal Revenue Secretariat, the increasing growth can be attributed to the continued stabilization of the national economy, and to the country’s decreasing unemployment, which has fallen to 4.6 percent this November.
The rise in collections was also explained, in part, by the government’s ongoing efforts to address regulatory issues surrounding local and federal taxes, and to the implementation of a unified electronic Public Digital Bookkeeping System (SPED), a real-time recordkeeping system tracking all transactions carried out in the country.
However, despite the improvement in tax collections, taxation experts have pointed out the increasing complexity of the national tax legislation, with a recent report by PricewaterhouseCoopers showing that Brazil has one of the most time-consuming tax systems in the world today.
Photo by: Jorge in Brazil