Taxation aiming environmental protection: The case of Brazilian Rural Land Tax

A proposed revision of Brazil's Rural Land Tax (ITR) could significantly increase tax revenue and enhance environmental protection by addressing current distortions. The study estimates that under the existing law, annual tax collection could reach BRL 5.75 billion, nearly four times more than the 2017 figure. However, this approach still falls short due to a large group paying minimal taxes while another is overpenalized. A revised model suggests potential revenue of up to BRL 16.8 billion annually, addressing key challenges like low revenue and environmental distortions. The research combines spatial modeling with legal analysis to propose science-based solutions that strengthen taxation as a tool for maintaining natural vegetation in the Amazon.

Fendrich, A. N., Barretto, A., Sparovek, G., Gianetti, G. W., da Luz Ferreira, J., de Souza Filho, C. F. M., Appy, B., de Guedes, C. M. G., & Leitão, S. (2022). Taxation aiming environmental protection: The case of Brazilian Rural Land Tax. Land Use Policy, 119, 106164. https://doi.org/10.1016/j.landusepol.2022.106164