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Taxes in Brazil Are Like Elephants and Hippos

Posted on the 29 April 2014 by Angelicolaw @AngelicoLaw

No matter where we live, taxes are a necessary burden that we all must face. As Benjamin Franklin once said, “In this world nothing can be said to be certain, except death and taxes.” While we all have the right to complain about the loss of our hard-earned money, few have it worse than the residents of Brazil. Most tax systems pale in comparison to the complexity and sheer volume of the Brazilian tax code.

For years, both residents and foreign investors have complained that the amount of time required on taxes is unreasonable. According to the World Bank, the average business will spend 2,600 hours every year on taxes alone in Brazil. Yet the Brazilian government, like so many others, has thus far ignored the calls for reform.

Hopefully that will soon change, and if it does, we have Brazilian tax attorney Vinicios Leoncio to thank. Leoncio spent 23 years aggregating Brazil’s federal, state, and municipal tax laws into a single volume. His book contains 4.3 million tax laws spread over 41,266 pages, culminating in a weight of over 15,000 pounds – about the weight of an adult female elephant and hippopotamus combined!

According to Leoncio, the book is not even complete. So far, it only contains laws through 2007, and approximately 35 new tax laws go into effect every day in Brazil. It is also missing the local laws of roughly 600 municipalities.

With so many tax laws, it’s no wonder why the general public, and even the tax specialists themselves, have difficulty understanding the laws. Who can possibly know four million tax laws along with their respective interpretations? This raises an important question: can tax judges rule properly when faced with so much material?

The complexity of the tax system in Brazil raises serious concerns not only for local businesses, but also for international investors. Foreign business owners frequently find themselves frustrated by their inability to grasp the Brazilian tax system, and they are not alone. In its 2013 Doing Business report, the World Bank ranked Brazil 159th out of 188 countries when it comes to the ease of paying taxes.

Brazil’s economic future depends on the government’s ability to encourage local and foreign investment through sensible incentives and responsible management. There is significant work to be done and no single action will solve all of the country’s problems overnight. Reforming Brazil’s mammoth tax system, however, would be a gigantic step forward.


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