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Mudanças no sistema tributário e no mercado de crédito e seus efeitos sobre a informalidade no Brasil [Changes to the tax system and credit market and their effects on informal work in Brazil]

Author

Listed:
  • Nelson Leitão Paes

    (PIMES/UFPE)

Abstract

In this paper we analyze the impacts of some changes in tax and credit policies on informal business in Brazil. To do this, we use a computable general equilibrium approach. The main findings shows that a reduction in 1% of tax rates on production or on labor income or capital income can reduce the size of the informal sector and the number of informal jobs, without reducing tax revenue. A more accurate result can be obtained with a reduction in the cost of credit instead of using lower tax rates. The most effective policy seems to be the reduction of taxes on production.

Suggested Citation

  • Nelson Leitão Paes, 2010. "Mudanças no sistema tributário e no mercado de crédito e seus efeitos sobre a informalidade no Brasil [Changes to the tax system and credit market and their effects on informal work in Brazil]," Nova Economia, Economics Department, Universidade Federal de Minas Gerais (Brazil), vol. 20(2), pages 315-340, May-Augus.
    • Handle: RePEc:nov:artigo:v:20:y:2010:i:2:p:315-340
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    More about this item

    Keywords

    informality; general equilibrium; taxation; credit cost;
    All these keywords.

    JEL classification:

    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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