Brazil’s lower house of Congress is expected to vote on tax reform next week, with the bill likely be amended to exclude certain small companies’ profit and dividend taxes, senior lawmakers steering the process said on Wednesday.
Voting on the stage of the bill aimed at simplifying and lowering personal; income taxes and levies on corporate profits will take place when Congress returns from recess next week, Speaker Arthur Lira told GloboNews.
Speaking in Brasilia, deputy Celso Sabino, the bill’s sponsor in the lower house, said small firms registered with the ‘Simples’ tax regime will likely be exempt from paying tax on profits and dividends.
He also added that there was a “strong possibility” the 20,000 reais ($3,883) monthly threshold above which companies must pay a 20% tax on dividends could be reduced. The economy ministry proposed this threshold and rate only last month.
Sabino said he will meet with representatives of city mayors and state governors in the coming days to discuss the proposals, and to insert “triggers” in the bill to ensure local authorities do not suffer financial losses with the reforms.
“We are very close to a text that is ready to be voted on,” Sabino said after a meeting with Economy Minister Paulo Guedes.
Brazil’s government last month unveiled proposals to reduce income tax for up to 30 million workers, cut corporate profit tax, and increase levies on financial market gains. Brazil’s tax regime is widely seen as one of the most complex in the world.