Source: Gazeta Online, 21/06/2009

Along with unemployment and loss of income for companies and individuals, ethical behavior is one of the first victims of the retraction in productive activity. At such times, there is a growing temptation to adopt illegal practices, such as evading taxes, hiring employees without a formal contract, not respecting contracts or consuming products of dubious origin.

For accountant João Alfredo de Souza Ramos, who works daily with legal entities, a crisis is not necessary for companies to enter the informal sector. “The tax burden is very high and the profit margin is small. Faced with this situation, the entrepreneur opts for informality and begins, in most cases, to evade taxes. It is the worst way, but it is the reality ”.

According to him, the supermarket, wholesale, pharmacy and medication sectors, and transportation - public, cargo and passenger sectors - are among those that suffer most from the high tax burden. “These entrepreneurs, especially micro and small ones, do not live, they survive. It is good to remember that micro and small are responsible for employing more than 50% of the workforce in Brazil ”.

The accountant says that one of the main reasons for entrepreneurs to enter informality is the lack of confidence in the government. “New fees and charges are created at all times. This weighs a lot in a tight box. Before breaking, they prefer to evade ”. It is good to emphasize that those who choose this type of path are very likely to break. There are fines that exceed the value of the tax by 150%.

Survival Guide

Companies and governments can take a series of measures to minimize the effects of the economic crisis and to avoid the risks of informality. see how

Companies

Join Our Team of Partners: Call on suppliers to discuss prices and payment terms. There is a strong argument in this regard: when a company experiences difficulties, suppliers will also be affected. Partnership in this case is not only desirable, it is a necessity.

Credores: Seek creditors before delaying payments. The company may open negotiations to review terms and interest rates, in order to adjust disbursements to the new cash flow reality.

Workers: Meet with workers' representatives and jointly study alternatives to avoid layoffs and unregistered hires. It is important to establish a good flow of communication with employees, so that they are aware of the situation.

Recovery: In the last case, study the possibility of adhering to the Judicial Reorganization Law, which gives grace period for the payment of creditors, provided that the company presents a recovery plan approved by them.

Governments

Get a quote: Review the budget, seeking to reduce spending on costs and preserving (if possible even increasing) the amount of public investments, especially in infrastructure. The improvement in this area helps companies and the economy as a whole to increase their productivity.

Incentives: Create tax incentives for sectors that have an extensive production chain, in order to have a multiplier effect. Labor-intensive segments should also be supported, thus combating unemployment.

Taxes: To study ways of easing the tax burden, making it possible to improve companies' cash flow and giving the consumer budget a break. Part of this money will be used for consumption and investments and will be returned to the State in the form of collection.

Inspection: Increase enforcement against tax evasion, smuggling and counterfeiting of products. The costs of these actions will be covered by the increase in revenue from the tightening of inspection.

Source: Etco

“The tax burden in Brazil is very high and the profit margin is very small. Most Brazilian entrepreneurs do not live, they survive ”
João Alfredo de Souza Ramos - accountant