Regulations and Government
Brazilian Aviation Tax Reform Up in the Air
Brazilian tax reforms remain ambiguous to bizav
Embraer Praetor 600
Brazilian tax reforms are unclear about how business aviation air taxi and charter operators will be taxed. (Photo: David McIntosh/AIN)

The reform and simplification of Brazil’s arcane tax system, with its confusing accretion of cascading taxes, is underway in its congress after 30 years of discussion. The unification of municipal, state, and federal taxes and a reduction in their number—for example, with a single national rate for fuel excise taxes—offers hope for aviation but also the specter of a possible extension of motor vehicle excise taxes to aircraft.

Changing the entrenched tax structure is neither fast nor easy, requiring the amending of the book-length Brazilian constitution, and even if the proposal, PEC 45/2019, moves quickly through congress, it will take effect only in 2029-2034. The current structure is blamed for constraining economic growth and discouraging foreign investment.