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VALUE-ADDED TAXATION AND THE TAXES ON CONSUMPTION IN BRAZIL: EXTERNAL INFLUENCES
ANDRÉ MENDES MOREIRAPROFESSOR OF TAX LAW – MILTON CAMPOS SCHOOL OF LAW (BRAZIL)PhD IN TAX LAW – UNIVERSITY OF SÃO PAULO (BRAZIL)
1
TAX BURDEN IN BRAZIL
TAX REVENUE VAT05
101520253035
Chart Title
2
VAT: THE BEGINNING
GERMANY
1918
FRANCE
1948
VAT
Von Siemens
3
SOURCES OF INFLUENCE REGARDING THE ADOPTION OF
VAT
INTERNATIONAL MONETARY FUND
FRENCH EXPERIENCE
E.C. DIRECTIVES“Member States shall replace their present system of turnover taxes by the common system of value added tax”. Article 1, First Council Directive 67/227/EEC (1967)
“The IMF has focused over the last twenty years on implementing a VAT in all countries”. Miranda Stuart (2003)
“The Neumark Report, as it was constantly referred, was submitted in 1962 which gave birth to the value-added tax”. F. Andic & A. Reisman (2007)
NEUMARK REPORT
4
THE SPREAD OF THE VAT TIME PERIOD
COUNTRIES ADOPTING THE VAT
NUMBER OF COUNTRIES
1948-59 France, Brazil 02
1960-69 Germany, Uruguay, Sweden, Denmark, Netherlands, Côte d’Ivoire
06
1970-79 UK, Chile, Peru, Colombia, Korea, Israel, Italy, Argentina, Ireland, Palestine, Peru, …
20
1980-89 Turkey, Portugal, Mexico, Japan, Niger, Taiwan, Senegal, Morocco, Guatemala, …
19
1990-99 China, Canada, Paraguay, Ghana, Finland, Russia, Jamaica, Vietnam, Venezuela, …
75
2000-06 Australia, Sudan, India, Namibia, Ethiopia, Zimbabwe, Cape Verde, Botswana, Laos, …
14
5
VAT
Non-VAT
TOTAL REV-
ENUE
VAT
0
20
40
60
80
100
MORE THAN 20 TRILLION DOLLARS IN TAX REVENUE/YEAR.
VAT/TOTAL REVENUE (ESTIMATED PER COUNTRY)
% WORLD'S POPULATION
6
THE EVOLUTION OF THE BRAZILIAN TAX SYSTEM
7
1500 1822
IndependenceDiscovery
8
1824 1891 1934 1937 1946First Constitution Republic of Brazil Constitution Constitution Constitution
9
Coup d'état
1964
Tax Reform18th Amendment
1965
Democratic Constitution
1988Constitution
19671st Amendment
1969
10
THE EXTERNAL INFLUENCES ON THE
ADOPTION OF THE VAT WITHIN THE SCOPE OF THE 1965 TAX REFORM
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18TH AMENDMENT AND THE VALUE-ADDED TAXATION
OLD SALES TAXES VALUE-ADDED TAXES
FEDERALCONSUMPTION TAX TAX ON MANUFACTURED PRODUCTS(PAID BY MANUFACTURERS)
STATETAX ON SALES AND CONSIGNMENTS TAX ON THE SALE OF GOODS(PAID BY MANUFACTURERS, WHOLESALERS AND RETAILERS)
12
CONSUMPTION TAX
LAW No. 2.974/56
LAW No. 3.520/58
VALUE-ADDED TAX
FRENCH INFLUENCE
13
THE FULL ADOPTION OF VALUE-ADDED TAXATION IN BRAZIL
1965 PROFESSOR CARL S. SHOUP “The Tax System of Brazil”
“The state-level VATs in Brazil were the first operating examples anywhere of value-added taxes extending through the retail level, and Professor Shoup clearly had a hand in this occurrence.” Malcolm Gillis (1991)
“Shoup played a key role in the acceptance by the Neumark commission of the VAT as the standard form of sales tax in the European Community.” Wayne Thirsk (1991)
14
A NEW CHAPTER: REDEMOCRATIZATION & THE
1988 CONSTITUTION
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THE NEW CONSTITUTION
MAINTENANCE OF THE GENERAL LINES OF THE 1965 TAX SYSTEM
DECENTRALIZATION EFFORT
TAX ON MANUFACTURED PRODUCTS SAME CHARACTERISTICS
TAX ON THE SALE OF GOODS BROADER BASE TRANSFER OF
TAXING POWER FROM THE FEDERAL GOVERNMENT TO STATES
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VALUE ADDED TAXATION HISTORY IN BRAZIL: THE LAST
STAGE
FEDERAL TURNOVER TAX
LEVIED ON GROSS REVENUE
CONTRIBUTION FOR THE SOCIAL INTEGRATION PROGRAM
CONTRIBUTION FOR THE SOCIAL SECURITY
17
APPROVAL OF THE 42nd AMENDMENT TO THE 1988 CONSTITUTION
CREDITS OFFSET CALCULATED BASED ON GROSS REVENUE
IMF INFLUENCE
18
CONCLUSION
19
✔
✔
✔FRENCH EXPERIENCE
SHOUP REPORT
INTERNATIONAL MONETARY FUND
CONSUMPTION TAX/TAX ON MANUFACTURED
PRODUCTS(FEDERAL)
TAX ON THE SALE OF GOODS(STATE)
SOCIAL CONTRIBUTIONS ON GROSS REVENUE
(FEDERAL)
VAT
20
THE NEXT STEP
TAX ON MANUFACTURED PRODUCTS
TAX ON THE SALE OF GOODS AND SAVINGS
CONTRIBUTION FOR THE SOCIAL INTEGRATION
PROGRAM
CONTRIBUTION FOR THE SOCIAL SECURITY
NEWFEDERAL
VAT
21
THANK YOU VERY MUCH!ANDRÉ MENDES [email protected]
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