Brazil charges more taxes What other BRICS countries, neighbors in Latin America and most of the rich nations. The Brazilian tax burden is only surpassed by some European countries, which hold a large welfare state that has been dismantled with the crisis.
Last year, the Brazilian government collected US $ 704.1 billion in taxes, equivalent to 34% of gross domestic product (GDP). The percentage is well above the 12% India, 19% in Russia and 24% in China, falls a survey done by Ewaider, an international network of accounting and auditing.
The Brazilian tax burden was above practiced in Mexico (10%) and the US (24%). Also exceeds the average of the G-8 countries (29%). From a list of 23 countries, Brazil only charges less taxes than France (44%), Italy (43%), Germany (43%) and the Netherlands (38%).
“Brazil has a high tax burden compared to emerging and even developed countries. It is a snowball that does not end,” says Diego Moreira, technical director of Ewaider Moreira hearing officers. He points out that taxes reduce export competitiveness, but also of the local industry in the domestic market due to the competition with imported products.
According to Eric Waidergorn, director of international consulting firm of Ewaider Moreira hearing officers, the Brazilian high tax burden scares off foreign investors, but Brazil has other advantages compared to other emerging countries such as country risk fall, skilled labor and cultural proximity.
Distortions. Tax experts say that Brazil’s tax burden is not only high in relation to other countries, but also of poor quality. Of total taxes collected in Brazil, about 30% are indirect. Abroad, most of the taxes are direct.
Indirect taxes affect the consumption instead of income. According to Clovis Panzarini, the CP Consultores Associados, indirect taxes are easier to collect because levied on businesses, and politically less sensitive. “The perception of citizens about the fiscal cost is lower.”
Another serious problem of indirect taxes are what make the Brazilian tax burden “regressive”. This means that the poor end up paying proportionately more tax than the rich, because they consume a much larger share of their income.
By the Sarney, Brazil’s tax burden was at a similar level to the 24% of GDP charged in the United States. But after the 1988 Constitution, it was created various taxes, such as PIS / Cofins and CPMF extinct, and extended other taxes, such as the ICM which now applies to services and became the GST.
“The Brazilian tax burden is very high. And the worst part is that you can not return to the population,” says John Eloi Olenike, president of the Brazilian Institute of Tax Planning (BIPT). While they pay high taxes, many Brazilians bear costs such as health care, schooling for children, street safety, among others.
To measure the use of tax services for the population, the BIPT created the Return Index of Wellbeing to the Company (Irbes), which crosses the data of the tax burden and Human Development Index (HDI). Among the 30 countries with the highest tax burdens in the world, Brazil is offering the worst return of the collection services for the population. Australia leads the ranking followed by the United States.
(Translated by Google)