Tax reform in Brazil: where to begin?

Abstract

The national political-economic debate in the recent times has pointed to the need for Brazil to carry out  structural reforms that will enable it to overcome one  of the greatest economic crises in its history. This text  deals mainly with issues involving a Tax Reform for the country, highlighting the theoretical framework that  guides it at the international level (the Optimal Tax Theory) and the need to correct the main (direct and  indirect) distortions arising from current national tax  arrangement. Based on those aspects, the main  objective of the article was to discuss, in the light of  international experience and of the theoretical and  empirical accumulation of the national literature, the  paths that Brazil can follow that contribute to a Tax  Reform that is at the same time a promoter of  efficiency and equity. It is concluded that a better  calibration of the Brazilian tax system can be offset by  the change in indirect taxation in favor of a Value- Added Tax, and that tax justice to be able to be  increasing taxation on capital and equity, in  compliance with the theorical propositions of optimal  tax theory.