Formalization favors business growth


Source: The Entrepreneur, 26/02/2009

Yane Cioffi works at the reception of a gym and sells sweet and savory pies that she makes at home. Lúcia Xavier sells themed handmade baskets that she also makes at home. These entrepreneurs reinforce domestic budgets with informal work and became known for word of mouth marketing. According to Sebrae, there are about 11 million workers in Brazil in the same situation as Yane and Lúcia. But according to Paulo Melchor, legal advisor to Sebrae, the new legislation of the Individual Microentrepreneur (MEI), created by Complementary Law 128/08, can qualify informal workers who earn up to R $ 36 thousand per year, encouraging business growth.

Melchor argues that the majority of people working in the informal sector face difficulties to grow. "The informal worker may even feel at a disadvantage because he has to comply with fiscal and tax obligations if it were formal, but he will not have a great chance of growing", he emphasizes. According to Melchor, informal workers are at risk of inspection and can be fined, in addition to not collecting social security contributions. He points out that the new legislation is a unique opportunity to get out of informality. “Even activities developed at the residence will be allowed and will have specific regulations. And these micro-entrepreneurs will not need to issue notes to individuals, ”he points out.

Yane, who sold 300 homemade panettone last Christmas, argues that working informally is advantageous, as there is no need to have a commercial point, retain employees and pay taxes. Famous for chocolate truffle pie, Yane also sells whole grain and special pies for diabetics. She says that to please customers, she puts herself in their position and strives to make the recipe look great, using the best ingredients. “However, despite enjoying working at home, I dream of having my own business”, he reveals.

Lúcia also prefers to work from home to avoid financial commitments, such as paying taxes and retaining employees. She has been making custom handmade baskets for 10 years. “My daughter had the idea and started to develop this work, after she graduated she went to work in her area and I continued to make baskets. At the time I started there was less competition, now it is more difficult ”, he analyzes. Lúcia says that the basket orders vary from month to month and increase significantly during holidays. She also explains that she was known for making a good product and the spread of her work spread by word of mouth. "I can say that with this work I manage to survive and it also helps me to reinforce the budget", he evaluates.

In Melchor's view, the legislation was a far cry from these informal workers and there is still a lack of further dissemination of the new law. "Now there is an opportunity to formalize with the MEI, which will rescue the citizenship and social values ​​of informal workers", he concludes. Registration for the MEI will be free and the worker will pay R $ 51,15 in contributions to the INSS, R $ 1,00 to the ICMS and whoever is a service provider will pay an additional R $ 5,00 to the ISS.

On March 9, Sebrae, the Ministry of Social Security, the Mixed Parliamentary Front of Micro and Small Enterprises in the National Congress and other entities will hold the last meeting to define the strategies for putting the MEI into effect. The implementation of additional benefits will also be discussed, which will make the Individual Microentrepreneur even more attractive to informal entrepreneurs, with greater red tape in joining the mechanism and structuring an integrated system to simplify the main and accessory obligations of the new legislation.