Calculation of sectoral economic-tax impacts caused by tax changes: computable general equilibrium model applied to the Brazilian economy

Abstract

This work aims to simulate the main proposals for tax reforms currently under discussion in the country as well as other changes suggested, through CGE model adapted to Brazilian needs. The model used was ORANI-G, widely used for public policy analysis. The model was calibrated with data from the Brazilian economy for 2015. The changes in the model were aimed at providing it with greater tax breakdown, as well as allow simulating the implementation of a tax on value-added. The implemented simulations deal with the replacement of employers' social security contributions for a new contribution on gross or a contribution on the value-added revenue, besides the tax on replacement products or services by a VAT. It is concluded that the changes bring positive effects, both in relation to the main macroeconomic variables and in relation to the performance of the great majority of economic sectors.