Brazil reintroduces unpopular payroll tax Brazil reintroduces unpopular payroll tax

Brazil reintroduces unpopular payroll tax
05 Jun 2018

Government efforts to end a costly truckers’ strike in Brazil have brought about the return of an unpopular payroll tax that was eliminated seven years ago.

According to BNA, in a bid to persuade striking truck drivers to end their three-day road blockade, which has resulted in shortages of goods throughout the country, the lower house of Congress approved a Bill eliminating two federal taxes on diesel fuel.

But in order to make up the revenue that will be lost as a result of the change, it also approved a Bill ending a payroll tax cut for 28 different business sectors. A further 28 industries will likewise see the tax break eliminated during 2021.

In 2011, the Brazilian government had allowed all 56 of these sectors to replace a 20% payroll tax with a 1-3% tax on gross revenues.

The reintroduction of the payroll tax is being opposed by numerous business associations, but the Bill has stalled in Congress.

Emma Woollacott

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

Government efforts to end a costly truckers’ strike in Brazil have brought about the return of an unpopular payroll tax that was eliminated seven years ago.

According to BNA, in a bid to persuade striking truck drivers to end their three-day road blockade, which has resulted in shortages of goods throughout the country, the lower house of Congress approved a Bill eliminating two federal taxes on diesel fuel.

But in order to make up the revenue that will be lost as a result of the change, it also approved a Bill ending a payroll tax cut for 28 different business sectors. A further 28 industries will likewise see the tax break eliminated during 2021.

In 2011, the Brazilian government had allowed all 56 of these sectors to replace a 20% payroll tax with a 1-3% tax on gross revenues.

The reintroduction of the payroll tax is being opposed by numerous business associations, but the Bill has stalled in Congress.

Emma Woollacott

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

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