Progressive tax reform should be initiated in Brazil to prevent the growing economic slowdown caused by the recent COVID-19 pandemic, as well as to reduce the socioeconomic inequality, Ciro Gomes, the vice president of Brazil's Democratic Labour Party (PDT), has told Sputnik
MOSCOW (Pakistan Point News / Sputnik - 29th April, 2020) Progressive tax reform should be initiated in Brazil to prevent the growing economic slowdown caused by the recent COVID-19 pandemic, as well as to reduce the socioeconomic inequality, Ciro Gomes, the vice president of Brazil's Democratic Labour Party (PDT), has told Sputnik.
Earlier in April, Brazil's Economy Ministry said that the country's deficit may amount to seven percent of the GDP in 2020. In comparison, Brazil's deficit last year was below one percent.
"It is already clear that Brazil is experiencing one of the greatest economic crises in its history ... progressive tax reform is essential. Today, Brazil is one of the very few countries that do not charge taxes on profits and dividends from companies, only about 4 percent tax on large inheritances, and has an inefficient and heavy [tax] system on production, while also burdening consumption, but not the income. If Brazil were to charge the wealthier more, the country would have the capacity to regain the balance of public accounts," Gomes said.
Even though the Latin American country is suffering from the effects of the COVID-19 pandemic and the economic slowdown, there is still a chance that it may prevent the deepening of the crisis by adopting an effective policy, the former presidential candidate underlined.
"Unlike many countries, Brazil has sufficient capital to overcome this crisis without the need for default. But we need political cohesion and a national development project that understands the country's needs and challenges and points to a direction of growth and reduction of inequalities," Gomes added.
Brazil is the worst-affected country in Latin America, with over 60,000 confirmed COVID-19 cases and some 4,500 related deaths. President Jair Bolsonaro has been a consistent opponent of the restrictions on people's movement introduced by the country's regional authorities. Bolsonaro has warned that the lockdown measures could lead to severe consequences for households and the economy as a whole.
