🤼 Relitigating the tax reform?

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Happy Friday! Brazilians are celebrating the country’s cinema, as “I’m Still Here” racked up three Oscar nominations: Best Actress (Fernanda Torres), Best International Feature Film and, unexpectedly, Best Picture. It is the first time that a Brazilian movie has been nominated for the Academy Awards’ most prestigious honor.

The tax reform discussions are not over

Brazilian lobbies representing farmers and investors have joined forces to overturn President Luiz Inácio Lula da Silva’s vetoes on key provisions of the tax reform regulation bill. 

• The president signed the bill into law on January 16. The overhaul of Brazil’s complex tax system boils down to the consolidation of five existing consumption taxes into two VAT-like taxes: one federal (CBS) and another for state and municipal levels (IBS).

Driving the news. One contentious veto targeted the exemption of real estate investment funds (FIIs) and agro-industrial investment funds (Fiagros) from these new value-added taxes. Congress had originally approved the exemptions, but Lula’s administration struck them down, citing legal concerns. The government argues that Congress granted tax benefits without any corresponding measures to offset the resulting revenue loss, which is not permitted.

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