Entrepreneurs highlight tax complexity and uncertainties in the global scenario as challenges

By Deborah Oliveira

Brazilian and Canadian companies are optimistic and want to further expand bilateral negotiations. This is what the survey conducted during the 1st Brazil-Canada Economic Forum, an event of the Chamber of Commerce Brazil-Canada (CCBC), indicates. The survey involved more than 170 representatives of national and foreign companies that already operate in business partnerships or intend to start.

Among the respondents, 72% stated that they intend to increase the volume of international business between Brazil and Canada and are optimistic about business growth, while 28% are analyzing how the market behaves.

However, 29% of the responding companies pointed out that tax complexity is the main obstacle to business growth in the business environment. Following that, 26% highlighted uncertainties in the global scenario, 16% operational bureaucracy, 13% legal insecurity, 8% the high interest rate for financing. Another 8% stated that they do not see challenges.

Although companies have pointed to tax complexity and uncertainties in the global scenario as the main challenges for business environment growth, the current stage of negotiations for the free trade agreement between Mercosur and Canada, along with opportunities in various sectors of the economy, such as food, mining and infrastructure, are expected to play a major role in decisions in the coming months, and further accelerate business between the two countries.

The approval of the base text of the proposed Constitutional Amendment (PEC) for Tax Reform by the Chamber of Deputies on July 7 should further boost confidence among executives, bringing more optimism to the market. The simplification of the tax system may attract more investments and contribute to the country’s development. The text now moves on for analysis in the Senate.

The friendly atmosphere between the two countries also gained more visibility with the recent visit of Canadian Chancellor Mélanie Jolie, who met with President Lula in Brasilia at the end of June. The first visit by a Canadian Minister of Foreign Affairs to Brazil in ten years, Mélanie’s visit further strengthens the partnership between the two countries, which already have significant investment agreements in the infrastructure and clean energy sectors. The Chancellor clarified that Canada wants to invest even more in Brazil and stressed the importance of discussing issues related to environmental protection, inclusive

growth and human rights. The free trade agreement between Mercosur and Canada was also another relevant topic that guided the meeting.

The survey also revealed that 32% of the companies that answered the questions do business with Canada, followed by the United States (16%), Europe (13%), Latin America (8%), Asia and/or Oceania (5%) and Africa (3%). Another 23% reported that they are structuring their business to start international operations.