LatinNews Daily - 23 June 2023

*Aguinaldo Ribeiro, a federal deputy, has submitted a draft tax reform bill to Brazil’s lower house of congress. As the rapporteur of a congressional working group on tax reform, Ribeiro announced the group’s initial recommendations on 6 June. The legislation will be reviewed by other legislators who could propose further amendments. One of the main provisions of the bill would entail combining the five separate consumption taxes (IPI, PIS, Cofins, ICMS, ISS) into just two levies on goods and services akin to value added tax (VAT). However, Ribeiro stated that the draft legislation was still “preliminary”, as several provisions are still up for debate. The bill would involve tax reductions of up to 50% for some sectors, such as transport, healthcare, and education, but the exact percentages will need to be discussed further. The rapporteur also proposed discussing a regional development fund to compensate for the potential losses for state governments caused by the elimination of the ICMS tax, a major revenue source levied by state governments. The president of the lower house, Arthur Lira, said that the legislation is expected to face a vote in the first week of July.