No Sales Tax
Whenever you buy anything in Brazil, the price you see is the final price you pay because there is no sales tax. Instead, they have something called a Value Added Tax (VAT tax) that is common in Europe and a popular idea among some politicians in the United States as a way to gain additional revenue to the Treasury.
However, there are some downsides to a VAT tax, especially in emerging market like Brazil. It is a hidden tax. Consumers never even realize they are paying it. I can assure you that most Brazilians have no clue.
The tax works by placing a tax at all points of production of a product so that by the time it gets to market, the retail price has been raised by 30% or more, depending on the item. The VAT and high import taxes are the primary reasons why nearly everything in Brazil costs more than it does in the United States, especially electronics.
The Capital is Brasilia, not Rio or Sao Paulo
Rio was the capital until the middle of the 20th century when the government decided to move the capital to a planned city in the center of the country to encourage the population to move inward.
Roughly 70% of the entire population of Brazil lives within 50 miles of the Atlantic coast. The city of Brasilia was founded on April 21, 1960 and the government officially relocated.
Brasilia will be one of the main host cities of the 2014 FIFA World Cup.
The Harbor in Rio is One of the Seven Natural Wonders of the World
When the Portuguese first sailed into the mouth of Guanabara Bay in January 1, 1502, they must have been in awe of the natural beauty. They actually thought they were entering the mouth of a large river so they named it Rio de Janeiro, or River of January.
The stunning beauty of the bay above the water hides a dirty secret in the water. The bay is heavily polluted by sewage and run-off from unregulated sewer dumps over the decades. It is not uncommon to see plastic bags and everything you can imagine from a garbage dump floating on the water, and just below the surface. In fact, the picturesque bay with small boats anchored overlooks an empty beach. Everyone knows not to go into the water in the bay because of Guanabara Bay pollution.
The situation is made worse because the geography of the harbor and bay. What makes it one of the 7 natural wonders also keeps it polluted. Because it is an ideal harbor, shielded from the open ocean, there is no tidal action so the water in Guanabara Bay remains somewhat local and stagnant.
Efforts are underway to clean it before the 2016 Summer Olympics, but it remains to be seen how successful this will be because the pollution continues from locales inland that feed into the bay.
Size of Brazil
What is the size of Brazil compared to USA?
Brazil is roughly the same size as the continental United States covering almost half of South America with a total area of 3,287,612 square miles, but most people never really think of it as being that large. The country has a coastline of 4,655 miles. However, most of it is covered by dense jungles or areas that are remote and almost uninhabited, but if you placed it over a map on the lower 48 states in the US, the area would be about the same.
History of Brazil - Treaty of Tordesillas
Brazil was given to Portugal as part of the Treaty of Tordesillas in 1494. Before this decision, Portugal and Spain were involved in skirmishes in the new territories but it was finally brought before the church for a settlement.
What was the impact of the Treaty of Tordesillas?
The Spanish-born Pope Alexander VI decreed that all lands discovered west of the Cape Verde Islands should belong to Spain while new lands discovered east of that line would belong to Portugal. The line gave Portugal control of most of South America and everything eastward including the spice rich East Indies.
It was believed at the time that Portugal had pulled a fast one, but within a few decades Spain was discovering vast quantities of gold in Central America and the western parts of South America.
The 16th century would be a Spanish century and the riches brought back to Spain from their new territories made them a super power at the time.
Meanwhile, Portugal continued to trade spices and farm the land in Brazil, but they never found the gold reserves in any significant quantities in any of their territories.
Amazon Price: $29.99 $23.99 Buy Now
(price as of Dec 24, 2015)
Brazil Culture - Portuguese not Spanish
Brazil is the only country in Central or South America that speaks Portuguese. The Treat of Tordesillas gave what is now most of the Brazilian territory to Portugal and soon thousands of Portuguese settlers begin to arrive along the coast and through the decades it was taught to slaves imported from Africa and the native Brazilian.
It has been the official language of Brazil for centuries, but there are still more than 180 native languages spoken in the country, mostly within the interior.
Brazil is Named After a Type of Wood
Through the centuries after Portugal established colonies along the Atlantic coast, their main export was the brasil wood, so eventually the entire territory became known as Brasil, or Brazil as Americans know it.
It is worth noting however, that since 1968 it has been illegal to export Brazilian rosewood.
Brazil Money - The Real
The modern currency of Brazil was created on July 1, 1994 as part of a broader plan to stabilize the Brazilian economy after decades of boom and bust cycles and inflation.
The design of the new currency was the result of a broader attempt to stabilize the countries’ finances and to offer a real plan to do so. In fact, the Real gets its name from this “Real Plan” that was developed in the early 90s.
However, since its implementation, it has done little to reduce the boom and bust cycle of the Brazilian economy and the country almost defaulted on its debt in 2002. During that time, the Real reached an all-time low against the US dollar of almost 4 Reais to 1 US dollar.
Since that time, the Real has been up and down, riding a commodity boom through the 2000s, only to fall back to earth during the financial collapse of 2008.
Currently, the Real is trading around 2.70 to 1 USD.