Source: Estadão - SP - 20/07/2009

Expansion of the tax substitution regime provoked a wave of companies' actions in court. The expansion of the tax substitution regime in the State of São Paulo put businessmen and class entities on a war footing with the Serra Government. Since last year, 23 new sectors have been incorporated into the system, which already charged ICMS on the production of other segments, such as beverages, cigarettes, fuels and vehicles. The objective is to avoid tax evasion and unfair competition, while making collection more efficient.

On the other hand, the system has revealed some negative side effects for economic activity, which has resulted in a wave of lawsuits and the transfer of business to other states. São Paulo's Finance Secretary, Mauro Ricardo, attributes the movement to tax evaders. “In fact, those who evade are very upset with this regime. They can even leave São Paulo, ”he says, noting that the collection grew by R $ 3 billion in 2008 because of the regime.

CHANGE

Tax substitution consists of shifting the responsibility to collect ICMS from the entire sales chain to a single taxpayer (generally the industry), from the product leaving the factory to the final consumer. For this, the tax is calculated on a presumed basis of final price, and how much each company in the production chain would have added to the value of the goods. These figures are projected by the tax authorities based on market research.

Here is the first major criticism from companies: in many cases, the numbers of added values ​​projected by the tax authorities are incompatible with reality, says the lawyer for the Trade Federation of the State of São Paulo (Fecomércio), Sarina Sasaki Manata. There are situations in which the projected value represents double that practiced. In addition, the price difference between the products that entered the state revenue calculation system is large.

In the cosmetics sector, for example, a lipstick can cost R $ 10 or R $ 300. The tax will be calculated on a weighted average. In practice, whoever sells the product below this average ends up paying more tax. According to a renowned tax specialist, who prefers not to identify himself, with a 40% margin on a product of R $ 100, the ICMS will be R $ 25. “Selling at R $ 140, the rate remains at 18%. If it sells for R $ 110, the rate rises to 22,9%, and for R $ 160, it drops to 15,75%. This inhibits promotions and sales. ”

RESEARCHES

Mauro Ricardo says that the research is done by the associations themselves. “If they want to do the survey every month and send it to us, they can.” Tax attorneys estimate that it is not so simple. Price surveys must be done at government-defined institutions and can take up to 20 months.

“The situation caused the migration of a series of distributors and wholesalers to other states where the rates are lower and there is no tax substitution”, says the lawyer at Lacerda & Lacerda Advogados, Nelson Lacerda. He says that in the past few months his company has helped clients to open 15 branches outside of São Paulo. “They didn't close operations here, but they transferred part of the business. It became a fiscal war, ”he says.

The president of the Union of Distributors and Wholesalers of Industrialized Products of the State of São Paulo (Adasp), Sandoval Araújo, confirms that the tax system made the company that was out of here more competitive. The state report sought out some groups, but they avoided commenting on the matter for fear of reprisals.

This strategy began to be undermined with agreements that the São Paulo government has made with other states. "So far we already have ten protocols with states that are going to promote tax substitution", highlights Mauro Ricardo. In any case, the flow of goods destined for other States will continue to be made from units installed outside São Paulo.

Another complaint among businessmen is the fact that the government revoked a law that allowed, until December 2008, to refund the tax charged more by the tax authorities. The companies say that they often charge lower prices than those agreed in the advance collection of the tax and, therefore, they would be entitled to compensation.

Supermarket chains like Wal-Mart and Pão de Açúcar, and automakers question in court the end of the refund of this overpaid tax. “Companies are not against tax substitution. What they don't want is not to be entitled to reimbursement ”, says Leite's lawyer, Martinho Advogados, Leandro Martinho Leite.

He highlights another problem: the accumulation of ICMS credit by taxpayers in São Paulo who carry out interstate transactions. "In practice, as the refund procedure is very slow and bureaucratic, companies have accumulated credits, which reach R $ 10 million, which significantly affects the companies' cash flow in this moment of crisis."