Author: Miriam Leitão

Source: O Globo, 29/02/2008

29/02/2008 - A company in the pharmaceutical sector in Rio imports its inputs by plane. He disembarks them in Rio, takes them to Brasília, then to Anápolis, then brings them back to Rio, where the principles are encapsulated and return to Goiás, from where they are distributed throughout Brazil. Why does she make this 3 km trip? It is what companies call tax logistics.

The difference in ICMS between the states, the various incentives, makes it more important for companies to take advantage of these benefits than to save transportation, even though Brazil is a gigantic country with a poor transportation structure. “When discussing the location of a project, the cost of transportation is not asked, because even if it is 4% or 5% of the total cost of the company, it will be largely covered by the incentives, depending on tax logistics,” says Professor Paulo Fleury, from Coppead.

This irrationality has spread.

Today, countless companies travel with their products in Brazil, spending a deficient road infrastructure, emitting carbon and increasing their transportation costs, but being compensated by the tax discounts in each state. “This system is distorted, crazy and absurd. If a company in Paraná buys steel from CSN, it is better to buy it directly from a distributor in Bahia than directly from CSN in Rio. Brazilian companies have adapted so much to these distortions that the end of them can make many companies unfeasible, ”said Fleury.

As with all economic diseases, such as inflation, for example, the distortion of the tax system has created dependents.

All the reforms thought up to now - and shelved - had the same idea of ​​this current proposal: to unify the legislation and the state tax rates; switch from source to destination taxation; merge federal taxes. “Rio, in general, will lose R $ 700 million”, believes the State Finance Secretary, Joaquim Levy.

He advocates reform. He says that, with the country growing, with excess revenue, it is the best time to correct the distortions of the past.

In Brazil, changes and reforms only happen in crises.

Jurist Yves Gandra Martins was called to speak in Congress on all attempts to make a tax reform and on all changes that were made in taxes. He also thinks that there is a general law for these events. “50 years ago, all changes in taxes increased the tax burden.

The government promises a magic: not to increase the tax burden, but to start sharing with the tax states that before it did not share and, at the same time, not to lose revenue. You cannot achieve all three goals at the same time. One has to be fake. Or he doesn't lose anything, he shares what he didn't share, but it compensates for the increased load. Or it does not increase the burden, but it loses nothing with the division of taxes, but then it is not really division.

The path taken was the second option. The new share will share nothing. What the government proposes is, for example, to combine CSLL with Corporate Income Tax. It makes perfect sense. They are the same thing, they have the same triggering fact: they tax companies' profits. The CSLL was created so that the government would not have to share this tax with the states. When putting it all together, he would have to distribute the entire cake.

The government's strategy to transform contributions into taxes without the Union losing revenue was to maintain the link in the percentages of old contributions.

In practice, it is exchanging six for half a dozen, because the same amount of a contribution that went to a certain purpose, such as social security, for example, will continue to go, even if the basis is different. With that, the federative sharing, that is, how much goes to the state and municipalities will remain the same. The Treasury itself states that the intention is to carry out an “absolutely neutral” reform, ensuring that the change does not affect existing programs.

The proposed changes are not new and not yet.

Everything goes into operation long after approval. The transfer of the ICMS collection from the source to the destination will take eight years and will not be full: 2% will remain in the state of origin. The end of federal contributions turned into taxes (PIS-Cofins-Cide, which will be VAT-F) and the merger of CSLLIRPJ will come into force two years after the reform is approved; in practice, it would remain for the next government if it is approved this year. The exemption from the employer's contribution to social security on the payroll will be like this: one percentage point per year will drop from the second year of approval of the bill that will be sent to Congress 90 days after the approval of the tax reform. Understood? Gilberto Amaral, from the Brazilian Institute of Tax Planning, said that the proposal should have dared more: it could have reduced the tax burden, and it should have included the environmental variable, taxing differently by degree of impact on the environment.

In the proposal released by the Ministry of Finance, there is talk of grazing to revive the old Tax on Large Fortunes, created after a proposal by then-senator Fernando Henrique Cardoso, and never regulated.