House of Representatives Approves Tax Reform Bills with New VAT Sharing Formula

House of Representatives Approves Tax Reform Bills with New VAT Sharing Formula

The House of Representatives has approved the new tax reform bills, introducing a revised VAT sharing formula while retaining the current 7.5% VAT rate.

 These reforms aim to create a more equitable distribution of tax revenues among states based on economic activity and population.

Under the new formula, 50% of VAT revenue will be distributed equally among all states, 20% based on population, and 30% based on consumption, meaning the amount of VAT collected per state will play a key role in revenue allocation.

Additionally, the House clarified that inheritance funds cannot be taxed, ensuring that inherited wealth remains exempt from government levies. This decision addresses concerns about unfair taxation on family wealth transfers.