Programa EUROsociAL Fiscalidade Estratégias Fiscais Ligadas à Coesão Social Jefferson José Rodrigues Chief of Economics Studies Secretaria da Receita Federal Brasília – Brazil November 20-23, 2006 General Aspects of Brazilian Economy and Tax System Encontro de Especialistas em Política Tributária – Receita Federal e União Européia

Receita Federal Some Numbers GDP (2005) : US$ 796 billions (per capita: US$ 4.323) Decentralized Political System: 27 State and over than 5 thousand local government Regional Inequalities: 3 bigger States with 53% of the GDP; 3 smaller ones with 0,55% of the GDP Population: 180 million, 50 million below of poverty line (mensal income < US$ 40) General Aspects

Receita Federal GDP Composition General Aspects Industry 37.9% Agric. and Castle 8.0% Service 54.1% Source: IBGE

Receita Federal Brazilian Tax System ConsumptionIncomeSocial Sec.PropertyOthers  Federal IPI PIS/Cofins Cide Comb.  State ICMS  Local ISS  Federal IRPF IRPJ CSLL  Federal INSS  Federal Rural  State Vehicle  Local Urban % GDP % Tax B General Aspects * Burden tax in Source: SRF

Receita Federal Tax Burden Times Series 23.2% (1975) 37.4% (2005) Economic Stabilization Plan (1994) General Aspects Tax Collection (% of GDP) Source: SRF

Receita Federal Potential of Personal Income Tax General Aspects Amount of People (million) Just 4% of population are taxpayer of personal income tax Source: SRF and IBGE

Receita Federal Social Security System General Aspects Social Security Pension System Social Care System Health System Payroll Taxes Consumption Taxes

Receita Federal Income versus Consumption General Aspects About 50% of the tax collection goes to state and local government Usually, the contribution collection are not shared with others government levels.

Receita Federal Tax versus Contribution * General Aspects Taxes Contributions Others * Only for Federal Government and excepted pay roll contributions Tax Collection (% of GDP) Source: SRF

Receita Federal Income versus Consumption Taxes * General Aspects * Except pay roll contributions and unemployed insurance (FGTS). Income Consumption Others Tax Collection (% of GDP) Source: SRF

Secretaria da Receita Federal General Aspects of Brazilian Economy and Tax System Brasília – Brazil November 20-23, 2006 Programa EUROsociAL Fiscalidade Estratégias Fiscais Ligadas à Coesão Social Encontro de Especialistas em Política Tributária – Receita Federal e União Européia