Ipea shows that GDP can grow up to 2.39% with the tax reform

Economic growth

Study analyzes the impacts of proposals being voted in Congress

A study by the Applied Economic Research Institute (Ipea), released this Thursday (6), shows that the tax reform proposal being voted on by the Chamber of Deputies can provide 2.39% growth in the Gross Domestic Product (GDP, sum of of goods and services produced in the country), by 2032, in relation to the scenario without any reform. According to the analysis, during the transition period, when the old system is gradually replaced by the new one, the simulations in all scenarios show GDP growth.

The note titled Tax reform proposals and their impacts: a comparative assessmentby Ipea researcher João Maria de Oliveira, brings a survey of 68 sectors of economic activity, for the 27 units of the Federation and compares it with ten countries with which Brazil has commercial relations.

The simulations reveal that changes in the tax structure generate economic growth. “The reform proposals promote structural change in favor of sectors with a longer production chain, with a greater multiplier effect and, consequently, with greater productivity. Thus, in addition to promoting economic growth, the reform aligns the Brazilian economy to grow even more”, said the researcher, in a note.

Another point discussed concerns the positive result for the employment balance. “Although the gains are small, there is an increase in more qualified and higher income jobs. But, with the change in taxes, there are real gains in labor productivity, which is configured as further evidence that the tax reform will bring gains in productive allocation, as it stimulates the increase in job offers”, evaluates Ipea.

The researcher sees the current scenario optimistically. “We have an opportunity now with this consensus created between the productive structure, several sectors, the three federative entities and, mainly, states and municipalities that are affected in different ways, depending on the region. I think a consensus is possible, it seems to be close and it will allow Brazil to be in an advanced stage of economic growth”, he concluded.

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