Author: Roberto Mateus Ordine

Source: Anamaco - São Paulo / SP - 26/07/2010

When the current tax system came into force in the mid-sixties, the Brazilian economy was experiencing another reality. The auto industry was only in its infancy and we did not yet exist for the world. Our economy was based on the domestic market. Our exports were limited to coffee and a few products.

The National Tax Code, promulgated by Law No. 5.172 / 1966, introduced the current National Tax System, a modern system for the time, the result of the work of a commission of renowned tax lawyers, led by the late Rubens Gomes de Souza.

Time has passed and the world has undergone radical transformations. The distances narrowed and Brazil gained a prominent position, - having at this moment - everything to play a new role in the world economy. Our tax system, however, remains the same and more complicated, with an asphyxiating tax burden and a frightening fiscal bureaucracy; with the unreasonable introduction of tax forms and information, incompatible with the current world.

From its implementation to the present day, CTN has suffered so much violence, with the appearance of debatable taxes and increased taxes, which would cause shame to its noble authors. The current tax burden borders 36% of GDP, with a growing collection, above the trillion reais for this year.

On the same track of success, the tax machine has become more sophisticated, creating one of the most efficient tax controls in the world. On the other hand, taxpayers who were unable to keep up with this improvement in the tax system are becoming more complicated, both with regard to taxes and the fulfillment of ancillary obligations. There are so many fiscal controls required by the Union, States and Municipalities, that small taxpayers are unable to properly comply.

Faced with this dark scenario, everyone is crying out for tax reform, to simplify this real sum, hoping for a reduction in the excessive burden of taxes and contributions, which - in turn - end up reflecting on the increase in the population's cost of living. There is so much tax (direct and indirect) embedded in the production chain, that our prices lose competitiveness.

After several attempts, however, the tax reform was postponed, precisely because of the difficulty of reconciling the interests of the federal entities, which approve the idea, as long as they do not lose revenue, under the argument that without it, they will not be able to fulfill their function public.

Therefore, little remains to be done but to find an alternative to improve the current tax system, without the dreamed of reform. Perhaps the best way is to deconstruct the normative cipoal created over these forty years of CTN's life. Deconstruction may be the way out to simplify the system; drastically reducing the number of tax forms and controls, in addition to lowering taxes, via reduced rates. All this through infra constitutional legislation, where the excess, which was introduced in this past period, would be removed. For this, however, the political will of the government is needed.

For the poor taxpayer, there is little interest in the legal mechanism to be used, as long as there is a reduction in the tax burden. This is because, for both the entrepreneur and the consumer, the important thing is the lowest cost in the final price of the goods. Without such a measure, we will continue to tow history, losing sales to those imported from countries that have had this tax vision in the past.

* by Roberto Mateus Ordine, legal director of Anamaco.

Source: Anamaco