On Wednesday, members of the Brazilian House of Representatives approved a key bill aimed at significant tax reform, intended to boost productivity by streamlining the tax system criticized for increasing business costs.
House members are conducting additional votes on amendments to the proposal.
The bill still requires a vote in the Senate, which includes the regulations needed for the constitutional tax reforms passed last year.
The reform will merge the existing five types of taxes into a single consumption tax, also known as Value-Added Tax (VAT), with different rates at the federal and regional levels. It will also impose taxes on products deemed harmful to the environment or human health, such as cigarettes and alcoholic beverages.
The list of harmful products also includes gambling games and electric vehicles (EVs), with some lawmakers citing the environmental drawbacks of discarded electric vehicle batteries.
House members modified the original version of the bill to cap the overall consumption tax rate at a maximum of 26.5%.
President Lula's government initially submitted the tax legislation to Congress in April.
Although the approved text did not include beef in the list of tax-exempt basic products, lawmakers later voted for an amendment to align it with the President's recent comments supporting the idea.
