Brazil and the legacy of the colonial tax model

By ETCO

Author: Antônio Almeida

Source: Diário da Manhã - GO - 12/09/2009

Studies formulated by reputable national and foreign organizations are unanimous in one finding: Brazil has not yet managed to overcome the cursed heritage of colonial times regarding the extraordinary voracity of the power constituted to impose taxes on the population. On the contrary, the data attests that, especially over the past fifty years, they were created in an incredible profusion. They are tributes as far as the eye can see in a tangle of varied codes and laws, multiple acronyms and meanings as ingenious as they are metaphysical.

Something that would be unimaginable even by the most tyrannical kings of Portugal who, after the decline of the sugar trade, invented the collection of the fifth - a tax charged by the Portuguese Crown in the Foundry Houses, which corresponded to 20% of all the gold found in the Colony - the from the exploration of the gold mines of Goiás, Mato Grosso and Minas Gerais. It is a situation that transforms the country into a kind of modern slave quarters, where we Brazilians have become slaves to the device controlled by insatiable rulers. This gives us a better dimension of the patriotic sentiment that throbbed in the hearts of Tiradentes and his peers from the Inconfidência Mineira, disagreed with the exaggerated collection by the Crown of taxes levied on gold mining.

History shows that, in addition to the mining movement, many other revolts and conflicts also occurred in that period, precisely because of this absurd exploitation ordered by the Imperial House. These are the cases of the War of the Emboabas, the War of the Peddlers, the Guaranitic Wars, the Uprising of Felipe dos Santos in Vila Rica, the Uprising of the Beckman brothers in Maranhão and the Uprising of the Tailors in the Captaincy of Bahia.

The most recent World Bank study (Bird), “Doing Business - 2010” reinforces the conclusion that this slave model still reigns here, even after almost two centuries after the end of Portuguese domination. The Crown just changed its name and its headquarters gained a new address. After all, Bird reveals that the Brazilian businessman works 2.600 hours each year to settle his accounts with the tax authorities. It is the highest level seen in a group of 183 countries. The Brazilian businessman lives a daily paranoia with countless taxes and fees bureaucracy, since he is obliged to pay federal, state and municipal taxes on different collection dates and calculation bases.

We are ahead of Cameroon (1.400 hours), Bolivia (1.080 hours) and Vietnam (1.050 hours). The Brazilian comparison with Switzerland is striking, where the entrepreneur works 63 hours a year to pay his taxes. The regional comparison is shameful, since the average of Latin American countries is 563,1 hours worked. We also lag behind countries like Colombia, Chile, Peru, El Salvador and Nicaragua, in terms of ease of doing business, which considers among other items: requirements for opening a business, labor legislation, property registration, payment of taxes , foreign trade and closing companies. In the ranking of easiest places for doing business, Brazil was in 129th place, two positions behind the previous report, when the country occupied 127th place.

All this plastered bureaucratic framework and draconian tax burden only serve to inhibit the country's development, encourage the informal economy and fuel corruption. This is evidenced by this study by the World Bank, which also points out the almost insurmountable obstacles to opening a business in Brazil. The Brazilian bureaucratic machine requires 16 procedures - one of the highest levels in the world - which consumes about 120 days against an average of 45,5 days across Latin America.

Not only entrepreneurs, but almost the entire nation lives under this slave taxation. The Brazilian Institute of Tax Planning shows that Brazilians spend more than half of their life expectancy - 72 years and four months - to pay the taxes. That is, on average, 36 years and four months only pay to pay the tax burden on your income, goods and consumption.

It is the prevalence of the inversion between the State and the citizen, where the financing of the public power has become much more important than the life of the Brazilian himself. The worst thing is that this tax burden has been rising over the years. The result is the increase in the price of the national product and the removal of businessmen from the country. The national product loses competitiveness in relation to foreigners, mainly in the international market and many entrepreneurs prefer to invest in the financial market papers instead of opening a venture, generating new jobs. When will our country break free from this tax domain that goes back to Colony Brazil?

Antônio Almeida is president of the Social Responsibility Council of Fieg, president of the Printing Industry Union of the State of Goiás (Sigego) and Abigraf / Regional Goiás and CEO of Editora Kelps
Source: Antônio Almeida