Jurist defends tax reform and criticizes the taxation of fortunes

By ETCO

Author: Fernanda Bompan

Source: DCI - São Paulo / SP - 22/09/2010

SÃO PAULO - Entrepreneurs are concerned with the approval of the complementary bill that regulates the collection of taxes on large fortunes. The lawyer Ives Gandra Martins estimates that, if the project is approved, a private company in 20 years would start giving all its assets to the government, "which would make it practically a state-owned company". “This project is absurd. And the most worrying is that if Dilma [Rousseff, candidate for PT] is elected, this project will be approved, in order to completely disrupt the entire national business community ”, warns the expert, when attending a seminar held yesterday by the Business Leaders (Lide). The project was approved by the Constitution and Justice Commission of the Chamber of Deputies and is being processed in the plenary of the National Congress.

The proposal is from PSOL deputies Luciana Genro (RS), Ivan Valente (SP) and Chico Alencar (RJ). According to Ives Gandra, the project foresees taxation that varies according to the size of the patrimony. The rate will vary from 1% to 5%, depending on the size of the wealth. For equity of R $ 2 million to R $ 5 million, the tax will be 1%. Between R $ 5 million and R $ 10 million, it will be 2%. From R $ 10 million to R $ 20 million, 3%. From R $ 20 million to R $ 50 million, 4%; and 5% for wealth exceeding R $ 50 million.

“Because of an ideology, the companies that most activate the economy and, therefore, generate jobs, will be burdened”, says João Doria Jr, president of Lide, a group composed of 702 companies, which together represent 44% of the Domestic Product Brazilian gross (GDP).

In the seminar called “Tax Reform: Essential for the Country”, the manifestation of the businessmen present indicated that the tax reform is the most desired of the changes that the government needs to make. In a quick survey carried out during the event, from a universe of 172 representatives of large companies such as Nestlé, Visa Vale, Gocil, Accor and Amil, 88% answered that it is urgent or very urgent to implement the tax reform. This same questionnaire was made six years ago, during a seminar that dealt with the same topic. At the time, for this issue, 91% considered the changes “urgent” or “very urgent”. With regard to proposals, 70% say that load reduction should be covered, a drop compared to the seminar six years ago, when 90% approved the reduction. The elimination of tax incentives, which gave rise to the fiscal war between states, is considered by 79% of representatives as necessary. In the last poll, 83% had this same opinion. In addition, for 56%, the approval of a single VAT (value added or added tax) would be an important change in the structure of the tax system.

Pressure


According to Ives Gandra, a social mobilization is necessary for a tax reform to be carried out, similar to the one that removed the collection of the CPMF. “Pressure from society can influence political will. All the presidents were not interested in the reform, since who wants to get rid of a net tax cake of 60% and a gross tax of 70%? ”, He asks. “On the other hand, awareness is lacking. Everyone says they need reform, and I ask what they suggest for change, and nobody indicates anything, ”he says.

For the lawyer, the problem that occurs in the current tax system is that there is no tax policy, but a tax policy. “There are 20 years of unsuccessful attempts to carry out tax reform. We are at square one, with no prospect of reform, apart from those that provided an increase in revenue, ”he explained.

He drew attention to the abusive tax collection carried out in Brazil. “China collects half of the 34,4% collected by Brazil. The tribute defines the profile of a nation, of a democracy. Something is wrong. We are very late, ”he said. At the same time, according to Ives Gandra, this tax burden, together with the increase in public expenses, undermines the country's growth. “35% of GDP is collected and only 1% is invested. This means that the public machine consumes everything ”, comments the expert.

For the jurist, the taxes are conditioned by the bureaucratic burden. “The bureaucratic burden will always require greater taxation. It is necessary to eliminate it ”, he says. In this way, in his opinion, this is the most viable moment for the systematic and gradual reduction of the tax burden, since the country is experiencing rapid growth and foresees an increase in tax collection. “The reduction of taxes is possible, but only if there is a stagnation in the growth of the tax burden and public expenses. Otherwise, the increase in revenue will imply an increase in the bureaucratic machine and we will not leave this vicious circle ”, he evaluates. “The government needs to manage as a private company, otherwise, it loses the global competition, which does not happen only between companies, but also between countries”, adds the president of the São Paulo Commercial Association, Alencar Burti.

Entrepreneurs are concerned with the approval of the complementary bill that regulates the collection of taxes on large fortunes. Lawyer Ives Gandra Martins estimates that, if the project is approved, in about 20 years a private company would start to give all its assets to the government, "which would make it practically a state-owned company". “This project is absurd. And the most worrying is that if Dilma [Rousseff, candidate for PT] is elected, this project will be approved. ”