Source: Diário do Comércio (São Paulo - SP) - 22/05/2012

President Dilma Rousseff has insisted that, if it is not politically possible to make the tax reform broad and unrestricted that makes the tax collection system in Brazil more friendly to taxpayers and to the economy as a whole, it is possible to achieve substantial advances in this area. It is one of the biggest obstacles to Brazilian competitiveness.

 In recent days, the president has insisted mainly on the weight of taxes on electricity, one of the Brazilian paradoxes - we have one of the energy matrixes capable of producing one of the cheapest electricity in the world and, at the same time, we have the third electricity bill. the most expensive light in the world, both for houses and for that consumed by the productive sector. The tax would eat 50% of the bill. It is no wonder that Alcoa, an aluminum producer and a major buyer of electricity, threatens to close two of its factories in Brazil and transfer the jobs it gives here and the taxes it pays to the Treasury abroad.

Official actions in this area are expected for the next few days. And in the wake of this new crusade by President Dilma, after the successful, at least public, campaign against high interest rates, the Minister of Communications, Paulo Bernardo - long since disappeared from the debates as practically all the ministers of the president - came to the scene to speak and propose the same in the telecommunications sector in general. Also in these accounts, the tax boat beats the 40% quota easily.

As the popular saying goes, however, speaking is easy, doing is that they are “another five hundred thousand kings”.

What the federal government can do in these two sectors, specifically, is very little in relation to the size of the tax charged. The biggest weight, as every business owner knows, is a state tax, the Tax on Circulation of Goods and Services (ICMS). In fact, Minister Bernardo drew attention to this small great detail: in order to substantially reduce, as necessary, the tax burden on both energy and telecommunications, the contribution of the governors would be necessary.

And it is at this point that Neves died - or will die -. Today, more than 60% of what the state tax authorities collect comes from the ICMS charged on only five product categories: electricity, telecommunications, fuels, vehicles and beverages. There is no governor who wants - or even can -, in the current conditions, to give up this mine, since they are sectors of concentrated collection, easy and to collect and to inspect.

In fact, the governors, like the mayors who booed President Dilma in an uncivilized manner last week, have the opposite claim to the Brasilian plans that can reach their coffers: they want more resources. They want the federal government to share the tax pie better with states and municipalities. In the general sum, although the ICMS is the most important tax (and the most complicated to operate for companies) the largest part of the tax delicacy remains with Brasília - more than 60%.

Any talk to them about lowering the ICMS will actually begin if Dilma and Minister Mantega wave compensations. Many governors rely on the redivision of oil royalties to improve their cash. It turns out, when it came to making this breakdown, the federal government again took most of it for him. It came to nothing.

So, whatever is being discussed, the sliced ​​tax reform that President Dilma Rousseff intends to do to circumvent the obstacles that precede a deeper change in the way the Brazilian State finances itself will always be a patch, better or worse, a little depending on the stylist of the moment.

And so we are left in this impossible world: we have one of the biggest tax burdens in the world, state governments that complain about not having enough money to fulfill their obligations and public services to make them cry. And with no solutions in sight.

All because the debate is still wrong. The changes will only happen for real and in the right direction when you first look at the expense side. Initially, it is necessary for the reform of the State to prune uselessness and inefficiency. And how are we doing? Nowhere? For example: what exactly is the commission headed by entrepreneur Jorge Gerdau for this purpose? What results have you presented so far? The president's true courage will be shown when she takes on the structures of the bureaucracy and the party-political body.

Without this, no one has the illusion that taxes could fall in Brazil for real and permanently.

José Márcio Mendonça is a journalist and political analyst