From rain forest to Rio

The Brazilian tax story starts in 1494 with the territorial disputes between Portugal and Spain about how to divide the New World between the two European imperial powers.

This resulted eventually in the Tordesillas Treaty that divided South America with everything east of the division belonging to Portugal and everything to the west belonging to Spain.

This explains why to this day Brazil is the only country in Latin America whose official language is Portuguese.

The official language of nearly all other Latin American countries is Spanish.

In order to gather political support for his expansion and colonial plan the Portuguese king decided to donate a chunk of the new territory to members of his court.

In doing so he gave them a free hand to do just about everything including establishing taxation which is why each state has a great deal of liberty to establish...