BRAZILIAN business owners pay some of the highest tax rates in the world, something many South African business owners struggling to survive can well relate to.

And like South Africa, the Brazilian government has began introducing measures to assist business owners there, with the approval by Brazil's chamber of deputies – the country's equivalent of parliament – of a new law which according to some may well see the legalizing of one million micro and small businesses when it is signed off by the President Luiz Inácio (Lula) da Silva.

Luiz Barreto (pictured above), Director Superintendent of Sebrae's operations situated in the state of Bahia, says the new law will reduce tax rates by some 35 to 50% for small businesses.

The new law called 'Lei Geral' (General Law) is expected to take force in July next year and will make paying tax easier for Brazilian firms, while cutting the rates and also contains various other measures, including efforts to reduce bureaucracy and tender opportunities targeted at small firms.

It will allow small businesses or businesses that have a turnover of R$2,4 million (about R7,95 million) or less, to pay their different kinds of taxes once per month instead of on different due dates for each different tax.

This is a revision of the federal government's 'simples' tax which was introduced in 1996.

The new law also allows for a revised system of tax brackets, meaning small firms in for instance the commercial sector only pay between four percent and 11,6% tax, depending on their turnover.

Also, the law aims to cut down the bureaucracy currently experienced by Brazilian firms, by creating one uniformatory registration sheet.

Currently, businesses have to obtain different licenses from state, municipal and federal structures.

But the law also goes further in an attempt to grow small firms by setting aside all tenders of $80 000 (about R260 000) and less, exclusively to small and micro businesses.

For business owners like Osvaldo Silva, the new law could help them expand and grow. Silva runs Rei da Codorna, a restuarant and a farm specialising in quail eggs and based in Salvador, Bahia - located in the north east of Brazil.

But he says because of high taxes and a difficulty obtaining a bank loan, his thoughts of expanding have had to be laid over.

Silva estimates he spends 67% of his business's turnover on paying staff salaries and taxes.

It is obligatory for business owners to pay employees' social security, their transport to work and lunch meals, as well as medical aid. He says he spends up to 35% of his turnover alone on his 23 employees.

On top of this, his son, who works in his business presiding over the administation spends some four hours a day on filing out tax forms and compiling various documents.

His unique products, which include quail meat, eggs and even a wine manufactured out of the bark of an Amazonian tree and mixed with quail eggs, have won him many awards already.

These awards include the Biz Awards of 2006, a set of United States awards aimed at Latin American business owners.

But right now, Silva who resigned 20 years ago from his job as a petro-chemical technician to start his business, says his biggest hassle is trying to obtain a loan from the bank.

Because Brazil has one of the highest interests rates in the world, with for example, up to 222% a year charged on Banco do Brasil credit cards, it remains virtually impossible for many business owners to obtain a loan.

Bahia, situated in the northeast of Brazil is the country's sixth richest state by GDP, but has a human development index which places it 22nd out of the 26 states of Brazil.

The state is also home to one of the largest black population outside of Africa.