Brazil targets dividend tax in income reform

Brazil's finance ministry plans to propose an income tax reform aimed at taxing shareholders receiving dividends from companies with below-average tax rates, while maintaining fiscal neutrality. The reform will exempt individuals earning up to 5,000 reais ($875.84) per month from income tax, potentially freeing an additional 10 million Brazilians from taxation and raising the total to 26 million. The government also intends to introduce a minimum tax for high earners capped at 10%, impacting around 160,000 taxpayers, though markets are skeptical due to concerns over revenue loss. In India, the Income Tax Bill 2025 has removed the deduction for inter-corporate dividends for companies choosing the 22% tax rate, a change anticipated to create cascading taxation effects and double taxation issues for companies and their shareholders. Experts warn that this could lead to significant tax implications for domestic companies and suggest that the anomaly needs addressing before the bill is enacted. Both reforms reflect a broader trend toward restructuring tax systems to increase equity and address fiscal challenges.