Brazil plans new taxes on tech giants to meet 2025 fiscal goals

Brazil’s Finance Ministry is preparing to introduce tax proposals to Congress aimed at taxing big tech companies and implementing a global minimum tax of 15% on multinational corporations. The measure is designed to secure Brazil’s 2025 fiscal goals in case of a revenue shortfall. The proposals align with global tax cooperation discussions that Brazil has been leading as the current chair of the G20.

The ministry’s executive secretary, Dario Durigan, emphasised the complexity of implementing these global tax measures, noting that the process requires approval from various countries. The 2025 budget bill projects a modest surplus and relies on an estimated 17.9 billion reais in revenue from increased income taxes. Additionally, the government proposed changes to corporate social contribution taxes and interest on equity payments.

To further boost revenue, the government plans to address tax waivers and compensation, which have been contentious in previous attempts. The ministry also counts 58.5 billion reais from tax negotiations and rulings, including settlements with large taxpayers and decisions by Brazil’s Federal Administrative Council of Tax Appeals.

Despite these efforts, some economists still need to be convinced about the government’s ability to meet its fiscal targets. Projections indicate a potential deficit in 2025, with estimates suggesting a shortfall of up to 110 billion reais, or 0.9% of GDP, compared to the government’s balanced budget goal.