BRASILIA, Jan 23 (Reuters) - Brazil’s Economy Minister Paulo Guedes has proposed taxing dividends and other shareholder payouts in order to reduce other corporate taxes and boost economic activity, business daily Valor Economico reported on Wednesday.
Guedes outlined the plans to business leaders at a closed lunch during the World Economic Forum in Davos, Valor reported, citing executives who were present.
“What they are going to do is reduce the fiscal burden on the productive sector,” Valor quoted Octavio de Lazari Junior, CEO of Brazilian lender Banco Bradesco SA, as saying.
The Economy Ministry did not immediately respond to a request for comment.
Right-wing President Jair Bolsonaro has said an overhaul of Brazil’s pension system is a priority for his new government, and Guedes has suggested a tax reform could follow on the heels of a pension reform.
Valor reported that Guedes was floating a plan to cut the corporate income tax to 20 percent from 34 percent and compensate with revenue from a tax on dividends and interest on equity — another form of shareholder payment common in Brazil.
On Tuesday, Bolsonaro reiterated to an audience in Davos his pledge to open up Brazil’s economy, foster competition and simplify and reduce the tax burden. Guedes is expected to give a press conference in the Swiss ski resort later on Wednesday. (Reporting by Jamie McGeever Editing by Brad Haynes)