Haddad says increased productivity requires a change in the tax system

Finance Minister Fernando Haddad once again criticized the current Brazilian tax system. Haddad spoke this Thursday (25) at an event at the Federation of Industries of the State of São Paulo (Fiesp). For the minister, Brazil cannot increase its productivity with the current tax system.

“There is no way to increase productivity in Brazil with this tax system. Congress is absolutely mature and society is anxious to see before it something that gives legal security to investors, and today I would say that just as important as that, legal security for the state’s tax base,” said Haddad, reported Agência Brasil.

According to the minister, the tax reform could resolve most of the problems of the current tax collection system, which has become, according to him, anachronistic and “monstrous”. “We are addressing a tax reform that is even more modern, because it introduces a Value Added Tax into the national tax system that practically solves a good part of the vices of the current system that, in my opinion, is the great villain for the low growth rates of the our productivity,” he said.

“The thing has become so monstrous that even the national State does not know how much it can collect. Every moment there is a judicial decision that undermines the State’s tax base and leaves us in a permanent state of insecurity,” he added.

The minister considers that the tax reform will bring stable rules, which will allow the State to know how much it can invest and spend. “And that businessmen can plan for the medium and long term. Investments today require a planning and predictability period that the current tax system cannot offer”, said Haddad.