Brazilian President Michel Temer on Tuesday signed a bill that will maintain tax incentives offered by state governments to businesses for terms of up to 15 years. The bill will become law immediately. Temer used his line-item veto power to red-line two minor provisions of the bill. The legislation allows most state-by-state tax incentive programs to remain in place despite legal challenges and legislative proposals aimed at eliminating such programs, which have generated what legal scholars call “tax wars” between states competing for investments. Under the billed as signed Tuesday, existing tax incentives will remain in place for periods varying in accordance with the original investment type. Many investments will continue to enjoy the tax incentives for the next 15 years. The bill also allows for new tax incentive programs as long as they obey the same time fram e as the existing programs. The bill also makes it easier for states to win approval of such programs via the National Confederation of State Finance Secretariats (Confaz).
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