This article evaluates the impact on the Brazilian economy of a tax reform that reduces distortions and cumulative taxes, using for such experiment the current proposal of the Brazilian Treasury Department (Ministério da Fazenda). We employ a standard dynamic recursive model calibrated as close as possible to the current Brazilian economy in our simulations, which are implemented by introducing in this artificial economy parameters corresponding to the tax reform. It is estimated that the current proposal would lead to an increase of 1.2 percentile point in the output growth rate in the eight years following its implementation and a long run gain of 14% from its current trend. The impact on the investment level would be very expressive, 40% in the same period, so that the investment rate would from 20% for 26%. Estimated welfare gains were also very large.
