Brazil Will Have World’s Highest VAT: 27.97%
For items in the basic basket, such as meat and cheese, it will be zero
Brazil may have the highest value-added tax (VAT) in the world. The tax could reach 27.97%, the highest level in the world, with Hungary at 27% and the United States averaging 6.6%, according to the Washington Tax Foundation think tank.
According to what the Brazilian Ministry of Economy explains – as reported by the Italian news agency ANSA – the changes made by the Chamber of Deputies to the tax reform bill, strongly supported by President Lula and debated for years, if the text is approved, the real consumption rate will reach 27.97%, which is 1.47% more than originally envisioned by the reform.
The Brazilian government needs to generate funds from consumer goods to offset public spending and finance some tax breaks, such as those on meat, cheese, rice, and some medicines, which, as items included in the basic basket, will instead have zero VAT. The new tax schemes, once finally approved, are due to come into effect starting 2026.
