On December 15, Brazil’s House of Representatives approved the final text of the Constitution Amendment Bill 45/2019 (PEC, in Portuguese) from Federal Deputy Baleia Rossi (MDB/SP). The approved PEC focuses on consumption taxation, but also establishes a deadline for the Executive Branch to present bills on income and payroll taxation.
The bill passed on the second round of voting—365 to 118. The Tax Reform PEC had already been approved by the House of Representatives, however, after changes during Senate proceedings, where it was approved 53 to 24, it returned to the House of Representatives for a second vote and now awaits promulgation.
In his third term as President of the Republic, Lula da Silva named the Tax Reform his administration’s top priority, creating the Special Secretariat for Tax Reform, inside the Ministry of Finance. The approval is seen as this year’s main victory of the economic team, considering that reforms of the tax system have been under discussion for over 30 years.
Read our comprehensive overview for a full breakdown of the tax reforms, net steps, and implications or business.
