1. VALUE-ADDED TAXATION AND THE TAXES ON CONSUMPTION IN BRAZIL: EXTERNAL INFLUENCES ANDRÉ MENDES MOREIRA PROFESSOR OF TAX LAW – MILTON CAMPOS SCHOOL OF LAW (BRAZIL) PhD IN TAX LAW – UNIVERSITY OF SÃO PAULO (BRAZIL) University of Wisconsin – Madison, USA –Seminar on International Tax Norm Transmission – April 29 th , 2010

2. TAX BURDEN IN BRAZIL

3. VAT: THE BEGINNING GERMANY 1918 FRANCE 1948 VAT Von Siemens

4. SOURCES OF INFLUENCE REGARDING THE ADOPTION OF VAT INTERNATIONAL MONETARY FUND FRENCH EXPERIENCE E.C. DIRECTIVES “ Member States shall replace their present system of turnover taxes by the common system of value added tax”. Article 1, First Council Directive 67/227/EEC (1967) “ The IMF has focused over the last twenty years on implementing a VAT in all countries” . Miranda Stuart (2003) “ The Neumark Report, as it was constantly referred, was submitted in 1962 which gave birth to the value-added tax” . F. Andic & A. Reisman (2007) NEUMARK REPORT

5. THE SPREAD OF THE VAT TIME PERIOD COUNTRIES ADOPTING THE VAT NUMBER OF COUNTRIES 1948-59 France, Brazil 02 1960-69 Germany, Uruguay, Sweden, Denmark, Netherlands, Côte d’Ivoire 06 1970-79 UK, Chile, Peru, Colombia, Korea, Israel, Italy, Argentina, Ireland, Palestine, Peru, … 20 1980-89 Turkey, Portugal, Mexico, Japan, Niger, Taiwan, Senegal, Morocco, Guatemala, … 19 1990-99 China, Canada, Paraguay, Ghana, Finland, Russia, Jamaica, Vietnam, Venezuela, … 75 2000-06 Australia, Sudan, India, Namibia, Ethiopia, Zimbabwe, Cape Verde, Botswana, Laos, … 14

6. MORE THAN 20 TRILLION DOLLARS IN TAX REVENUE/YEAR. VAT/TOTAL REVENUE (ESTIMATED PER COUNTRY ) % WORLD'S POPULATION

8. 1500 1822 Independence Discovery

9. 1824 1891 1934 1937 1946 First Constitution Republic of Brazil Constitution Constitution Constitution

10. Coup d'état 1964 Tax Reform 18 th Amendment 1965 Democratic Constitution 1988 Constitution 1967 1 st Amendment 1969

12. OLD SALES TAXES VALUE-ADDED TAXES FEDERAL CONSUMPTION TAX TAX ON MANUFACTURED PRODUCTS (PAID BY MANUFACTURERS) STATE TAX ON SALES AND CONSIGNMENTS TAX ON THE SALE OF GOODS (PAID BY MANUFACTURERS, WHOLESALERS AND RETAILERS)

13. CONSUMPTION TAX LAW No. 2.974/56 LAW No. 3.520/58 VALUE-ADDED TAX FRENCH INFLUENCE

15. A NEW CHAPTER: REDEMOCRATIZATION & THE 1988 CONSTITUTION

17. VALUE ADDED TAXATION HISTORY IN BRAZIL: THE LAST STAGE FEDERAL TURNOVER TAX LEVIED ON GROSS REVENUE CONTRIBUTION FOR THE SOCIAL INTEGRATION PROGRAM CONTRIBUTION FOR THE SOCIAL SECURITY

18. APPROVAL OF THE 42 nd AMENDMENT TO THE 1988 CONSTITUTION CREDITS OFFSET CALCULATED BASED ON GROSS REVENUE IMF INFLUENCE

19. CONCLUSION

20. ✔ ✔ ✔ FRENCH EXPERIENCE SHOUP REPORT INTERNATIONAL MONETARY FUND CONSUMPTION TAX/ TAX ON MANUFACTURED PRODUCTS (FEDERAL) TAX ON THE SALE OF GOODS (STATE) SOCIAL CONTRIBUTIONS ON GROSS REVENUE (FEDERAL) VAT

21. THE NEXT STEP TAX ON MANUFACTURED PRODUCTS TAX ON THE SALE OF GOODS AND SERVICES CONTRIBUTION FOR THE SOCIAL INTEGRATION PROGRAM CONTRIBUTION FOR THE SOCIAL SECURITY NEW FEDERAL VAT

22. THANK YOU VERY MUCH! ANDRÉ MENDES MOREIRA [email_address]