Source: Diário do Comércio (SP), 23/06/2009

The Brazilian knows that the tax burden in this country is one of the heaviest in the world. If you have not yet memorized all the figures, at least you are informed that each one works the equivalent of almost 150 days just to pay taxes, which add up to 36,5% of the Gross Domestic Product (GDP). It is undeniable that the country is in urgent need of tax reform. But, at least for micro and small companies (MPEs), much of this reform has already taken place in 2006, with the General Law on Micro and Small Enterprises.

It is important to know that it is not just a tax law, as it deals with various topics (bureaucracy, markets, technology, credit, etc.), which foster the development and competitiveness of MSEs, which is why it is called the General Law. And one of the subjects dealt with is Simples Nacional, a special taxation regime established in Article 12, such as the Special Unified Tax and Contribution Collection Scheme due by Micro and Small Businesses (EPP). “This was the way found to circumvent the legislation, which is bureaucratic and costly”, says Marcel Solimeo, director of the Instituto de Economia Gastão Vidigal of the Associação Comercial de São Paulo.

 In his opinion, in general, the law brought benefits to micro and small entrepreneurs, mainly in the tax area and in reducing bureaucracy. In some cases, it can create problems, as in the case of the small company whose revenue is at the limit of what the law provides, of R $ 2,4 million per year: “In order not to leave this differentiated tax regime, the entrepreneur avoids growing, or you can even split the company. While SMEs are protected by law and large companies have resources and strength to remain in the market, medium-sized companies are helpless, nor is there a definition in the legislation of what a medium-sized company would be ”, explains Solimeo.

The General Law on Micro and Small Enterprises (123/06) was signed by President Lula in December 2006. It regulates and expands, in most cases, the advantages of most micro and small companies in the country, creating a series tax and business facilities, such as differential treatment in public tenders. Complementary Law 123/2006 was subsequently amended by Complementary Law 127, of August 14, 2007. The main objectives of the amendments to the initial text of the New Statute were to improve the Special Unified Tax and Contributions Collection Scheme - Simples Nacional. In practice, the new system unified eight federal, state and municipal taxes that affected micro and small companies, such as: Income Tax, IPI, CSSL, Confins, PIS / PASEP, Social Security Contribution, ICMS and ISS.

The General Law is the new National Statute for Micro and Small Enterprises. Established by Complementary Law 123, of December 14, 2006, it has the objective of establishing general rules regarding the differentiated and favored treatment to be given to micro-enterprises (MEs) and Small Companies (EPPs) throughout the country under the terms of articles 146, 170 and 179 of the Federal Constitution.
In December 2008, the government published Complementary Law 128, which changes the rules of the General Law on Micro and Small Business (LC 126/2006), in the Official Gazette of the Federal Government. Among the measures, the new law makes it possible to solve problems claimed by the segment related to the collection of ICMS, creates conditions to reduce the bureaucracy in the process of opening and closing companies, allows the entry of new economic sectors in Simples Nacional and creates two new legal personalities, the Individual Microentrepreneur (MEI) and the Special Purpose Company (SPE).
Previously, other laws initiated the regulatory process for these companies, such as the 1998 National Statute for Micro and Small Enterprises, whose innovations were incorporated into the new law. In addition, the pre-company project, which was being processed by Congress, was incorporated.

The General Law on Micro and Small Enterprises delimits this category as those that earn up to R $ 2,4 million annually, being divided as follows:

Microenterprise - legal entity that invoices up to R $ 240 thousand per year;

Small business - legal entity that invoices more than R $ 240.00,01 up to R $ 2,4 million per year.

The rules for changing the company's status are practically automatic. Thus, if the micro company invoices more than the limit for one year, it will automatically become a small company next year and vice versa. In the case of a small company that exceeds R $ 2,4 million in revenues, it will be out of the system the following year. Anyone who tries to continue to benefit from the status of MSEs without being qualified will be fined.

Current situation

The General Law establishes in its paragraph 1, article 77, that the city halls are obliged to apply the general rules of differential treatment and favored to be dispensed to micro and small companies. A survey by Sebrae shows that the law benefits more than half of São Paulo's micro and small companies. In a year and a half, 73 cities - which concentrate 50,82% of SMEs formally constituted in the State - regulated the law at the municipal level. “There is still some disinformation. Some city halls think it is a tax law, which will reduce the tax revenue of the municipality ”, comments Júlio César Durante, consultant at Sebrae-SP, explaining that it makes it simpler to formalize, pay tax, obtain credit, have access to technology and also sell to the government.

In theory, the General Law has three basic principles: relief, reduction of bureaucracy and development (innovation and opportunities). “The city halls need to regulate the General Law, as it is in the municipality where the company is installed, and where it generates jobs, income and opportunities for the development of citizens”, adds Durante.

Cities like São José dos Campos, Santa Fé do Sul, Novo Horizonte, Jaboticabal, Campinas, Osasco, São Caetano do Sul and São Sebastião da Grama are already getting good results for having regulated the General Law and, mainly, betting on the potential of micro and small businesses. A survey carried out by Sebrae-SP shows that 84% of the municipalities that regulated the General Law had an increase in revenue.

In the State, the cities that have already regulated the law are: São Paulo, Campinas, Ribeirão Preto, São José do Rio Preto, São José dos Campos, Osasco, Mogi das Cruzes, Presidente Prudente, São Caetano do Sul, Americana, Taubaté, Bragança Paulista, Itapetininga, Jaú, Itu, Atibaia, Mauá, Barretos, Itapeva, Birigui, Ourinhos, Bebedouro, Piedade, Tupã, Jaboticabal, Itapira, Santa Cruz do Rio Pardo, Lins, Paraguaçu Paulista, Novo Horizonte, Porto Feliz, Campos do Jordão , Itanhaém, Itararé, Capão Bonito, Angatuba, Palmital, Rancharia, Várzea Paulista, Guaíra, Santa Fé do Sul, Taquarituba, Tambaú, Cajuru, Itaí, Monte Mor, Teodoro Sampaio, Buri, Martinópolis, Lucélia, Regente Feijó, Ilhabela, Miguelópolis , Salesópolis, Pompéia, Altinópolis, Florida Florida, São Sebastião da Grama, Itapuru, Colina, Taciba, Cajobi, Rafard, Salto Grande, Ouro Verde, Anhumas, Tarabai, Taquarivai, Emilianópolis, Gestal Bridges, Guarani d'Oeste, Narandiba and Pracinha .

Among the main initiatives implemented by the General Municipal Law, the Sala do Empreendedor, Government Procurement and Entrepreneurial Education projects stand out. In the first, the objective is to reduce the bureaucracy in the process of opening and closing a company, in addition to granting permits and licenses. In relation to government procurement, the initiatives adopted by some city halls in São Paulo aim to stimulate access and participation of MSEs in public tenders, offering priorities and advantages.

Regarding entrepreneurial education, the projects aim to include the discipline of Entrepreneurship in the grade of elementary school and the implementation of the Sebrae Young Entrepreneurs Program for public school students. In both cases, Sebrae offers free training to teachers so that they can develop activities with students aiming at the production and commercialization of products.