Agreement unites SDE and Revenue against tax evasion
O Globo - 13/09/2004
BRASILIA. The Federal Revenue obtained a reinforcement in the fight against tax evasion. An agreement signed with the Economic Law Secretariat (SDE), of the Ministry of Justice, now allows lawsuits from companies accused of harming competition to be sent to the Tax Authorities, in case of suspicion of evasion. Before the agreement, SDE filed cases of tax irregularity and continued only with investigations in the area of competition.
? Do we have to increase the effectiveness of the system to combat tax evasion? said Economic Law Secretary Daniel Goldberg.
Revenue receives first three cases from SDE
The agreement was signed in July and, so far, SDE has already sent three cases to the IRS. There are two processes in the beverage sector and one in the fabric sector. According to Goldberg, the three cases deal with investigations by companies accused of practicing predatory prices, that is, selling their products at prices below the cost price of goods, which affects competition in the market.
Goldberg explained that this type of conduct is also a strong indication of tax evasion. According to him, SDE asks companies investigated for predatory pricing to show their cost spreadsheets. The data are compared with the prices of raw materials, distribution and with the tax burden of the sector in which the company operates to identify where the irregularity is.
? Have we seen that, in most cases, companies' costs are below average because there is tax evasion? said Goldberg.
Average of irregularities is six times higher in the country
According to him, while most countries register one case of predatory prices per year, Brazil has about six (including the three that have already been sent to the IRS).
? Predatory pricing cases are not common in other countries, but we saw that, in Brazil, the number of investigations with this type of complaint was much above average. We found that, in fact, what is happening are not classic cases, but companies that evade taxes and, therefore, can sell their products at much cheaper prices than those of the competition? said the secretary, recalling that there are cases in which the difference between company prices varies from 60% to 70%.
Among the sectors that most have predatory prices in Brazil due to tax evasion are fuels, beverages and retailers.
The agreement also allows for the exchange of information between the two secretariats to facilitate investigations. SDE, for example, now has access to the registration system for Individuals (CPF) and Legal Entities (CNPJ). The Internal Revenue Service can now request information on the administrative processes conducted by SDE in cases where there is suspicion of tax irregularity.
The agreement should help the Revenue to increase the value of tax assessments against tax evaders. In the first half of 2004 alone, the Treasury conducted 25.996 investigations, and the total number of assessments reached R $ 16,36 billion. In all, 4.487 companies were inspected, which corresponds to R $ 14,995 billion in assessments. For individuals, the number of investigations reached 21.509, with fines of R $ 1,364 billion.
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