Source: DCI, 09/03/2009

Once again we find ourselves involved in the Tax Reform theme and, of course, without fulfilling the prerequisites that are indispensable for dealing with such an important issue.

Could it be that for a change of this magnitude were the real needs and desires of the population observed? Is this the country that people really want?

The ideal would be, in the first place, to have knowledge of the real needs, desires and investment possibilities of the population to identify the necessary size of the State. A careful analysis of the capacity to generate wealth and growth within a globalized context, versus sufficient expenses to manage this entire enterprise.

For the balance of public accounts, like any other, there is no magic: either the cost of spending is reduced and investments are restricted to the minimum necessary, or the revenue is increased. However, we only have news of this last part, that is, the collection breaking record after record, so that it currently represents something around 40% of GDP.

On the other hand, public spending costs are also growing in a disorderly manner and investment spending is only at the discretion of those on duty, often with no long-term purpose.

A great revolution has recently started with regard to the improvement of the collection system, that is, the Public Digital Bookkeeping System (Sped), in which, in addition to the use of the most advanced technological condition, we can observe the joining of forces collection of states, the Union and municipalities.

This will make it possible to monitor companies in an unprecedented way, resulting, inevitably, in greater collection.

Recently, at one of the meetings of the Directorate of Economy and Finance of the National Association of Executives in Finance, Administration and Accounting (Anefac), one of our colleagues (Louis Frankemberg) commented on the effects of process automation on companies that in the great Most cases result in a reduction in labor, followed by the following question: Will the government adopt the same procedure with the advent of Sped?

This made me meditate on this subject for some time, which made it difficult to conclude this article, since the subject deserves the attention of all those who grant powers of attorney to politicians through the vote.

After all, is tax reform really necessary? We believe that it is, but it must be preceded by some postulates in order to make this measure effective, otherwise we will see.

State Reform - How big is the State that we want and what is the size necessary for the good administration of the public good? Does the excessive number of ministries and secretariats resolve the issue of good administration? What will happen, in relation to costing expenses, if the administrative machine continues to be bloated? Let us give priority to the technicians who are doing Sped's lesson very well.

Political Reform - An issue that has been going on for several decades, with no solution, considering the personal interests that overlap the collective interest. Shouldn't legislative representation take into account the proportionality of the population of each state or municipality? This measure would match the vote value of voters in the various regions of the country.

Why is the district voting system not adopted, so that each region elects its representatives in order to make the monitoring of these mandates more effective?

Definitely, the politicians of the legislative houses must remain in the functions for which they were elected, that is, legislate and supervise the acts of the executive, instead of using the weight of the mandate to occupy administrative positions which should be occupied by qualified and competitive candidates .

It is necessary to take responsibility to avoid the recent attempt to increase the number of councilors across the country, around seven thousand, reaching even municipalities without financial conditions to collect this support.

Another suggestion goes in the direction of the earning limit of such representatives to the earning capacity of the population of each region or, even, to think about the gratuity of this work.

Finally, the Tax Reform, including an educational process in order to provide ordinary citizens with the knowledge, in their daily operations, of the tax cost of each good or service they acquire. Imagine some goods being offered in commerce as follows: Sales price (R $…) plus taxes (R $…), Total (R $…).

How would the price messages for vehicles, drinks, tobacco, food, clothing, and so on? Knowledge of the tax cost would be instantaneous for purchases of supplies for our home.

This will lead the population to a civic conscience and will certainly trigger a better monitoring of the public budget and control over the application of resources, so that, with each public spending initiative, be it funding or investment, there is a relationship to an increase in final cost of each product.

However, what makes the tax burden imposed on the people higher is the lack of return on utilities and services, such as: security, health, transport infrastructure, education and others that can give meaning to the doctrinal postulate that emphasizes being “the good being of the population is a citizen's right and a duty of the State ”.

Measures that reduce the tax burden, among others, may help the country to go through the great global crisis, since with more resources the population will be able to consume more, thus the production and circulation of wealth will increase and, certainly, the collection will also grow.