The Comparative Study on GST in India & Brazi...

The Comparative Study on GST in India & Brazil

Author Name : Kaliselvi K, Venkatesh G

INTRODUCTION

Brazil’s tax burden is one of the highest among developing countries, around 33 per cent of Gross Domestic Product (GDP) – which is close to the average of the countries comprising the Organisation for Economic Co-operation and Development (OECD). unlike developed economies, however, the Brazilian burden is more concentrated on indirect and regressive taxes, as opposed to direct and progressive ones. It is a widely recognized fact that the Brazilian tax system became increasingly distortionary during the last thirty years. This process of deterioration was accelerated after the modifications imposed in the tax system implemented with the 1988 Constitution. The indirect tax system, which comprises a multitude of federal, state and local taxes on corporate sales and financial transactions, was particularly affected. Ideas on how to reduce the distortions imposed by the Brazilian indirect tax system have been abundant and the subject of a continuous debate among organized groups in the private and public sector. Some of these ideas have been formalized in several comprehensive tax reform proposals submitted and discussed within the Brazilian National Congress. None of these proposals was successfully implemented, despite the positive welfare and economic effects revealed in computer simulations and the strong political organization and power of their supporters.