Source: A Notícias - Joinville / SC - 10/08/2010

Luciana Ribeiro

 

After three months of pressure from the business sector, Governor Leonel Pavan revoked, on Tuesday, the effects of tax substitution for micro and small companies. The measure is effective as of September and will affect 28 state enterprises, according to official data.

 

Tax substitution has been adopted by almost all Brazilian states to reduce tax evasion. Through it, the government stops collecting the ICMS from the merchant and starts charging it from the manufacturer or distributor. Fiscal control is easier, as fewer companies start to collect the rate.

With the governor's decision, the industries and distributors will continue to collect the tax in advance. The change will occur with the introduction of a reducer on the profit margin.

It will bring the tax burden back to the same level as in April, the month in which the tax substitution was implemented for 12 categories of goods. The end of the effects is valid for all these product groups, plus the perfumery and mattress sectors, which paid the rate according to the replacement since 2008.

 

 

Before the introduction of tax substitution, micro and small companies paid ICMS between 1,25% and 3,95% of their revenue. With the new regime, the industries started to collect the tax in 17%.

The measure would have affected 28 of the 144 small businesses in Santa Catarina, according to government data. The Federation of State Shopkeepers estimates that 70 thousand would be harmed out of a total of 180 thousand.

In addition to decreasing the merchant's profit, the tax substitution also increases the revenue of the State. When it was introduced, the Finance Department planned to increase its revenue by R $ 400 million between May and December this year. Now, the expectation decreases to R $ 200 million.

"The state is reaching out to businessmen," said Secretary Cleverson Siewert.

In return, the government will ask for greater mobilization of business federations to combat tax evasion. Figures from the secretariat point out that, while the general revenue growth last year was 9%, that of small companies was 3,5%.

According to Siewert, the projects in this category would have reported revenues of R $ 133 million in 2009. The value of sales on credit cards alone would have added up to R $ 222 million.

- The government will demand the effective growth (of the collection) of the ICMS. Otherwise, he will be obliged to return with this (reapply the effects of the tax substitution) later on - added the secretary.

The president of the federation of micro and small companies in SC (Fampesc), Márcio da Silveira, stated that solving the problem of tax evasion is not an easy task:

- But we will do the same work that we did to bring down the replacement to try to solve this problem.

The president of the Federation of Shopkeepers (FCDL), Sérgio Medeiros, celebrated the decision. Negotiations with the government were stalled until last week, when the FCDL gave up on continuing the dialogue. Throughout the process, the businessmen stressed that they were not asking the government to give up their revenue.

"What we didn't want was an increase in the tax burden," said Medeiros.