Brazilian Presidential Candidate Promises Tax Reform

by Robert Lee, Tax-News.com, London

10 July 2002

Brazilian presidential candidate, Ciro Gomes promised on Monday to substantially reform the country's tax system if elected.

Representing the Popular Socialist Party, Mr Gomes was thought unlikely to be successful in the October presidental elections- until this weekend. The PPS contender leapt into second place in surveys this weekend, putting him alongside government candidate, Jose Serra in joint second place.

Although left-wing front runner, Luiz Inacio Lula da Silva still leads the polls with nearly 40% support, the Reuters news service reported that one poll showed Gomes just three percentage points behind Lula in the - widely anticipated - event of a second round run off.

In an interview with Globo Television on Monday, Mr Gomes revealed that his two main aims should he become president are to transform the unwieldy Brazilian tax system, and to launch a new public pension system to give economic growth a boost. The former proposal is likely to receive the support of the Brazilian business community, which has long been calling for clarification and simplification of the country's tax system.

Mr Gomes told the television station that he supports the introduction of a value-added tax, representing a move away from the current system whereby the majority of business taxes are levied when goods are produced, rather than when they are sold.

The introduction of a sales tax would not only simplify the tax regime, but would allow businesses to invest more, the presidential candidate explained.

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