Author: José Maria Chapina Alcazar *

Source: O Estado de S. Paulo, 08/04/2009

In the extension of the international crisis, which swept almost 800 thousand jobs from the Brazilian market in the last three months, a question emerges: what can be done to contain unemployment? The answer is known: to foster entrepreneurship or, in other words, to give conditions of competitiveness to the productive system, mainly to small enterprises, which are the locomotive of the national economy. This is the niche that is deserving of vigorous government action, based on the reduction of social charges on the payroll.

As is well known, expenses with INSS, Guarantee Fund, education allowance, occupational accident insurance and others account for about 36% of the total paid to workers, with this amount reaching more than 100%, when cumulative incidences are accounted for. and the costs of unworked time, such as vacation, 13th salary, prior notice. In Asian tigers, the average of these costs is 11%.

It is not by chance that Brazil faces a phenomenon that tends to expand in this cycle of crisis: informality. Our country ranks 9th in informality, for which almost 40% of gross national income comes from the undeclared economy. The extent of the crisis over the most varied productive sectors begins to generate the “domino effect”, characterized by informality, in this case, irregular hiring of workers, purchase and sale of unreported products, counterfeiting of goods, copyright infringement, adulteration of products and tax evasion.

The GDP of the informal economy expands, visibly, diverting billions of reais from public coffers and placing the country in the ranking of productive disorganization. With a reduction of no more than 20% in the informal economy, we could raise the economy's growth rate by at least 1,5 percentage points, according to calculations by the McKinsey consultancy. The size of the gap in the economy can be estimated by the existence of about 11 million informal enterprises, more than double the 5 million formal micro and small companies registered with the commercial boards. What is the use of creating and expanding controls, such as Electronic Invoice, Public Digital Bookkeeping System (Sped) and others, if informality will work without records?

Even in the absence of extensive tax reform, aimed at reducing the burden on production, some achievements have been achieved in recent times to improve the performance of small enterprises. We recall the extension of the period for payment of IPI, PIS, Cofins and Income Tax at source, a decision that represents an extra capital turnover for companies of around R $ 21 billion. There are also considerable improvements made by Simples Nacional and the sanction of positive aspects, among which, the admission of new economic segments; the reduction of the tax payable for another group of sectors; the return of ICMS credits transfer; the creation of the Individual Microentrepreneur, which will benefit around 10 million Brazilians. But there is a contradiction. We obtained advantages with the simplified system, but the government creates the ICMS tax substitution to cancel any benefit of that regime.

On the other hand, the current ICMS payment deadline needs extensive revision, considering that the current schedule still causes companies to anticipate resources for State financing. We still have cases where payment is required by the third business day of the month following the sale. The example shows the lack of sense of maintaining a policy that disorganizes the cash flow, especially when the tax burden is taken into account, today bordering on 40% of GDP.

No productive sector is able to remain competitive in the face of a bank spread that is 11 times greater than the average practiced by the world market. If the high rate is healthy for banks, it is disastrous for production and unviable for small entrepreneurs. As can be said, without reducing and simplifying the tax burden and specific labor legislation, capable of inserting informal workers in the market, Brazilian entrepreneurship will continue to extend survival with specific measures. It is time for the country to stop improvising.

* José Maria Chapina Alcazar, businessman, is president of the Union of Accounting Service Companies and of Advisory, Expertise, Information and Research Companies in the State of São Paulo (Sescon-SP) and of the Association of Accounting Services Companies of the State of São Paulo Paulo (Aescon-SP)