Author: Julio Wiziack

Source: Folha de S. Paulo, 27/02/2008

The work was written by consultants and allies of the FHC government; without political connotation, the authors point out ways

LOCAL REPORTING

A World Bank study reveals that Brazilian companies declare only two-thirds of their sales volume to escape tax. A survey by the Latinobarómetro Institute shows that Brazil is in 16th place among the 18 countries that most violate the laws. Indicators like these are reflections of the famous “Brazilian way” that, according to the book “Cultura das Transgressões, Lições do Brasil”, has its days numbered.

The book, which will be released today in São Paulo, was coordinated by Fernando Henrique Cardoso and Marcílio Marques Moreira, and written by André Franco Montoro Filho, Bolívar Lamounier, Joaquim Falcão, José Murilo de Carvalho and Roberto DaMatta.

According to the authors, Brazil is being forced to deal with “trickery” and the costs it brings to the country due to international pressures.

"The integration of the Brazilian economy with that of the most globalized nations is forcing the country to move forward on this issue," says Montoro Filho. "In the global world, China, India and Brazil are under pressure to comply with good governance rules and this ends up reflecting internally."

The recent European embargo on Brazilian meat can be cited as an example. In order not to miss the deadline given by the Europeans, the Ministry of Agriculture sent a list with more than 2.600 names of properties, when the European Union expected a maximum of 300.

For the authors of the book, there are other barriers. The first is the geographical extension of Brazil and regional diversities. "There is common legislation that includes people who live in totally different realities," says Montoro Filho. "They end up distancing themselves from the government and looking for their own solutions," he says. "As the laws have huge loopholes for interpretations, enormous legal uncertainty is created," he says.

The problem is that this practice was so ingrained in Brazilian society that it affected its economy. According to the authors, tax evasion has become a collective practice, leading to successive increases in the tax burden. Piracy and informality have unbalanced competition and affected formal jobs.

To make matters worse, according to the authors, everything can be questioned in court. A survey by researcher Maria Tereza Sadek reveals that, in 2007, Brazilian companies were among those that spent the most time to fulfill their tax obligations. They lost, on average, 108 days and 9 hours finding ways to not only conform to the rules, but also to circumvent them.

For Roberto DaMatta, for the first time in history, the country begins to deal with these historical barriers. Before, it was said that inflation would never be tamed. "The decisive factors for the change were political and economic negotiations, not social contexts."

For this reason, Montoro Filho defends political decentralization as a way to advance against the “jeitinho” culture. “The Union would lose a little of its strength, allowing people to get closer to their governments in the States”, he says.