Source: Primeira Hora - SP - ECONOMY - 12/08/2009

Brazil is the most “westernized” of the countries that form the group known as Bric (Brazil, Russia, India and China) when it comes to the legal environment. According to the coordinator of the Legal Environment project, of the Brazilian Agency for Industrial Development (ABDI), Marina Oliveira, Brazil, due to its cultural characteristics and its opening process in the consolidation phase, ends up taking advantage in this field over the other countries of the group . ABDI is linked to the federal government.

Marina said that such a position gives foreign investors greater clarity about what the rules are, whether they apply to everyone and whether there are ways to ensure that they are applied in the face of some kind of obstacle. "In this context, Brazil ends up taking advantage, as it already has consolidated institutions and is still more westernized [among the BRIC countries]."

For her, this does not mean that other members of the BRIC have not found other ways to use the tax system to attract capital and foreign investments, such as China. “They have a very interesting experience, which serves to reflect on both the positive and negative points, which also teach us.”

Until 2008, Marina recalled, the Chinese offered foreign companies more favorable tax conditions than Chinese ones. Then, when the reform of the Chinese system was carried out, with equal conditions between local and foreign companies, it was realized that there was no significant impact on the country's ability to attract investment.

"Why? The companies were not going there because of these incentives, but for other reasons, such as cheaper cost, important consumer market, leading European and American multinationals to want to participate in this market, as well as neighboring countries, such as Japan, South Korea and Hong Kong, ”said Marina.

The example of China shows that Brazil should reflect on the exemptions, because, at times, there is the impression that reducing or removing taxes will “leverage” investments and development, when in practice “it is not quite like that”, observed. The important thing is to seek a balance between two main axes in the tax question. On the one hand, the State needs to raise enough to comply with obligations such as infrastructure, social policies, education and health and, on the other hand, it is necessary to balance the entrepreneur, who plans and carries out his own business in search of good results. "It is necessary to have a tax system that is not a burden for the entrepreneur and for free initiative", he added.

To analyze the impact of the tax system on the internal and external economic development of emerging countries like Brazil, Russia, India and China, specialists will meet tomorrow and the day after tomorrow (13 and 14), in Brasilia, in a seminar event promoted by ABDI and the Catholic University of Brasília (UCB).

“In the four countries, there is a discussion between the provinces or between the states, or the Union, in short, to know who collects, who collects what, how should the sharing of resources be, which is also a fundamental discussion in relation to ours tax reform [pending in the National Congress] ”, said Marina. She believes that the seminar will strengthen the exchange between such countries, so that they can seek, in this moment of crisis, in which they are less affected than the more developed ones, opportunities to provide the necessary competitiveness option and with an increasingly better legal environment.

The meeting is part of a research project that UCB was developing and ABDI decided to support, as it is a matter of interest. It is the end of a survey that compares the tax systems of the members of the BRIC, focusing on foreign trade and the productive development of these countries, in which Brazilian, Russian, Indian and Chinese teachers worked together. At the Brasilia meeting, the results of the analyzes will be presented. After the debates, the conclusions will be published.

Marina explained that the focus of her work is not on Brazilian tax reform, but she stressed that ABDI's main mission is to develop a productive development policy and guarantee the existence, within it, of a component of the legal environment. According to her, discussing the issue of the tax system and its relations with development is of interest to the association, because it contributes to the preparation of a work agenda for the future of Brazil in the area of ​​the legal environment related to the tax system and development.