Tax laws contribute to illegality


Source: Gazeta do Povo, 07/12/2008

The complex Brazilian tax legislation and high fines against those
disregarding the tax rules contribute to increasing corruption in the country. With
so many rules difficult to understand, many entrepreneurs end up having difficulties
compliance with legislation. This, in turn, increases the possibility that
companies to be fined. As the fines are high, the temptation to
bribe tax.

“The amount of taxes, the complexity of the tax system, coupled with the
amount of legislation and, as a result of bureaucracy, generates insecurity
in the taxpayer, who never knows if he is proceeding correctly. At the same time,
induces some to practice corruption ”, comments the president of the Institute
Brazilian Tax Planning Lawyer Gilberto do Amaral.

The simplification of the tax system, however, still seems a long way off. "THE
tax reform that is under discussion in Congress will change very little the
system. The Brazilian taxpayer is like a patient in the ICU, but the
government treats you with chamomile tea, ”says Amaral.

In his assessment, the fines for non-compliance with tax rules,
that reach high values, end up having the opposite effect of the desired: in
Instead of preventing tax evasion, they increase the possibility of corruption. “The fines
high rates suggest to the taxpayer that it is better to make a good deal (with the
Revenue) than taking on a high tax plus fines. So, there is no
doubt that this rate of fines, which reaches up to 150% of the value of the tax
due, they are incentives for an escape from legality ”, he says.

The fine against the Petrópolis brewery is an example of this. Second
investigation by the Federal Police, to try to get rid of a R $ 100 fine
million due to tax evasion, the brewery would have hired the
Marcos Valério, accused of being the operator of the monthly allowance, and Rogério
Tolentino. The two reportedly worked together with federal police in São Paulo on
attempt to initiate an investigation against the inspectors who imposed the fine.

The director of the NGO Contas Abertas, Gil Castello Branco, points out, however, that the
blame for the illegalities against the tax authorities is not just the fines or the
complexity of the tax system. “There is a historical and cultural problem,
that we are not going to see just ending the change in the law. ”


Two surveys - one from the University of Brasília (UnB), released this year,
and another from the Brazilian Institute of Tax Planning (IBPT), 2006 -
show the extent of corruption in the country and the lack of public spirit in the

IBPT Research

32% of taxes collected in Brazil are diverted by corruption.

34% of the total diverted is "consumed" by overpricing works.

25% are stolen and fail to generate benefits.

41% of the embezzled money is used to pay ghost workers or
with other practices like nepotism.

Unb Search

Public service

22% of civil servants have already failed to comply with the law.

18% admit to having already charged a bribe.


78% of Brazilians have already failed to comply with the law.

42% were not afraid of punishment.

50% tolerate nepotism in the public service.