Alckmin defends taxing dividends to stimulate investment in Brazil.
Presidential candidate Geraldo Alckmin (PSDB) defended the proposal to tax dividends as a strategy to attract investment to Brazil; he stated that it is necessary to "open up trade, conquering the market, reducing tariffs"; according to the presidential candidate, what counts is the "interest of the country" and that reducing tariffs can make Brazil gain market share "abroad"; regarding how to balance tariff reduction and the budget, Alckmin was direct: "tax dividends".
247 - Presidential candidate Geraldo Alckmin (PSDB) defended the proposal to tax dividends as a strategy to attract investment to Brazil. He stated that it is necessary to "open up trade, conquering the market, reducing tariffs." According to the presidential candidate, what matters is the "country's interest" and that reducing tariffs can help Brazil gain market share "abroad." Regarding how to balance tariff reduction and the budget, Alckmin was direct: "tax dividends."
"According to him [Alckmin], what is done today is to heavily tax corporate income tax, which leads to a lack of investment to distribute profits. "We have to stimulate investment. Investment is the result of profit. So reduce corporate income tax, contribution on net profit, and tax dividends," he explains. Alckmin concluded that the focus of this strategy is the resumption of investment, "because that's what will bring jobs, consumption, and production." This is not the first time a presidential candidate has raised the proposal to tax dividends, which is a highly controversial issue.
For the professor of Business and Tax Law and InfoMoney blogger Alexandre Pacheco states, "Simply replacing the taxation of corporate profits with the taxation of dividends, as advocated by proponents of the 'neutral change,' is a case of 'six of one, half a dozen of the other,' since the effect for the investor, in terms of return on invested capital, will be essentially the same."