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Brazilian elections and implications for tax

Brazilian elections and implications for tax

Matheus De Moura Sena discusses Brazil’s Presidential run-off elections to be held this weekend.

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Brazil city night skyline

Brazil’s Presidential run-off elections will be held this weekend. In line with a growing global trend of citizens rejecting ‘establishment’ politicians, the final showdown is between two polar opposite candidates, with extremely different economic perspectives, particularly regarding the role of taxation.

The front-runner candidates are Jair Bolsonaro from the rightist Social Liberal Party (PSL) and Fernando Haddad from the left-wing Workers’ Party (PT). Recent polls show Bolsonaro very likely to win, with 60 percent of the votes.

Bolsonaro, a reserve Army Captain and Congressman for almost 30 years, has a liberal economic agenda, calling for a reduction of government spending, lower taxes, privatisation of state-owned companies, and more flexible labour rights. His foreign policy targets opening trade for Brazil, especially with developed countries, and has an anti-China rhetoric.

Haddad, a lawyer, economist, political science professor and former São Paulo mayor, defends PT’s declared goal of benefiting the poorest. He follows a left-wing mentality of fighting crime through education and alternatives to imprisonment. He aims to increase government investment, maintain state-owned companies, increase taxes on the wealthy, and strengthen labour rights. Haddad’s foreign policy would uphold previous president Lula’s, focusing on BRICS, Latin America and Africa.

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This article was produced in collaboration between KPMG Australia Geopolitics and Tax Unit and KPMG Asia Pacific Tax Centre.
 

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