Brazil's Tax System: A Comparison Of China And Brazil

As members of “BRICKS”, China and Brazil are regarded as two of the highest potential developing countries around the world. To measure the wealth of two countries, GDP, the total market value of all goods and services produced in a country over a period of one year, could show how much these two countries have achieved. In 2016, China gains 11199.15 USD Billion (until Dec 16th), which is the second largest economy of the world, while Brazil earns 1796.19 USD Billion, as the 9th largest economy of the world up to the end of the year. Since the beginning of 21st centuries, China and Brazil’s GDP have risen in high speed. Although the GDP trend of Brazil has decreased since 2015 because of the economy crisis, Brazil’s economy begins to recover

To see the unique reasons of Brazil, taxation and corruption could be two important aspects that needed to be focused. For one thing, the heavy taxation that Brazil’s people are burdened with, could be a different cause of Brazil’s inequality from China. Brazil’s tax system is complex. A research named “Simulating Brazils tax-benefit system using Brahms, the Brazilian household microsimulation model” graphs the Brazil taxation proportion of income and finds that people in Brazil have to pay nearly 35% of tax of their income in average (Immervoll, Herwig, et al, 204). Also, most of the heavy tax burdens on consumers, especially on food, which might have a huge influence on the poor. For another, corruption could be the other different cause of Brazil’s inequality. It does not mean that China does not have the corruption problem, but for Brazil, the corruption is serious enough to badly impact on the inequality. The corruption in Brazil, especially in the form of officials’ collusion with enterprise, despoil much of national income and become richer. In this way, Brazil’s corruption distorts redistribution of the wealth and is an obstacle to inequality recovery. It is said that if Brazil’s corruption decrease by half, the income inequality would also decrease 54% totally (Ouyang and Sun, 57). In conclusion, the taxation and corruption in Brazil make the poor poorer, the rich