Author: Fernando Rodrigues de Bairros *

Source: Maxpress - São Paulo / SP - OPINION - 01/06/2010

Recently, ETCO - Brazilian Institute of Competition Ethics promoted a seminar with the objective of discussing ad rem taxation in the sectors that support the Entity, which, in the specific case of the beverage sector, is Ambev and Coca-Cola.

In fact, the Institute is yet another Entity with specific objectives of maintaining the ad rem taxation model in the sector. It is worth remembering that this system benefits, a lot, the leading companies in the sector, as they see this system as a great source of tax savings, since, proportionally, they pay much less tax than they should actually collect.

One of the clear effects of this system is the effective increase in the tax burden for small businesses and a huge reduction in taxes for large companies. This system, certainly, as the specialists hired by the Entity to promote the debate say, interferes with competition, where we fully agree with this assertion, because it makes products that are sold at lower prices more expensive and benefits products that are sold at higher prices, Obviously, they are the market leaders. The ad rem taxation procedure makes it difficult for new companies and products to enter the market, without considering that the entire market and competitive system is tied to a system whose beneficiaries are the market leaders.

As a matter of fact, what can be extracted from this resumption of discussions around the ad rem system is the fear that leaders have of competition, as they know that proportionality encourages the sector and increases competition.

This fear is notorious, because leaders always when in negotiation open the concern that a possible sectoral exemption - read proportionality - is harmful, not to the sector as a whole, but only to the market.

In 2009, the beverage sector dawned with a new taxation system, which reaches the IPI and the contributions of PIS and COFINS, which brought sectorial proportionality, but for large corporations this new taxation became a nightmare, as they often lead scares of a possible update of the bases of calculations, with that, once again the fear reappears, because who sells more expensive pays more. This possible update will generate an increase in the taxes of large corporations and this increase will only take two paths, either if it absorbs and reduces margins, or goes to the price of its products. In this dilemma lies all this discussion of taxation ad rem.

It is clearly noted that the entities supported by large corporations are in full working order and, regarding taxation, this work is the responsibility of the ETCO Institute, which attacks the system of proportionality and tax equality on a regular basis, always with the same rhetoric - evasion !

The discussions must follow the democratic and ethical principles of the debate, taking to the discussions all the variables of this system, such as the advantages and disadvantages of the ad rem system, the beneficiaries, the disadvantaged, the impact on competition and tax collection, in addition to what is It is necessary to involve the whole of society and not just part of it, chosen specifically to listen to their theories in order to convince them that the only way out of taxation is ad rem. It is worth remembering that debaters are always influential leaders in the media in which they operate.

What is seen, once again, is the economic power working desperately to avoid the reduction of its margins and the exorbitant profits, but, in fact, the great concern comes down to the fear of fierce competition. Where is ethics?

* Fernando Rodrigues de Bairros is president of the Brazilian Soft Drink Manufacturers Association - AFREBRAS