Source: UOL - São Paulo / SP - 11/10/2010

SÃO PAULO - Tax reform to reduce the incidence of taxes and stimulate economic activity or to effect changes in favor of social justice?

The next government will certainly include the theme of tax reform in its agenda. It is visible, however, that different reasons dictate the sectors of society in relation to this change: financial and social.

According to Agência Brasil, in the evaluation of businessmen, for example, the reform is necessary to allow investments to flow, so that prices are cheaper and consumption is leveraged.

On the other hand, economists critical of the national tax system point to an uneven payment, that is, poor people who pay proportionally more taxes than the richest.

The economist at Ipea (Institute of Applied Economic Research), Serguei Soares, understands that the current system is “pro-rich” and that a process in which direct taxation is stronger than indirect taxation is fundamental.

IRPF (Individual Income Tax) and IPTU (Property and Urban Territorial Property Tax) are examples of direct taxation, while ICMS (Tax on Circulation of Goods and Services) and IPI (Tax on Industrial Product) are examples of indirect taxes.

Barriers

Carrying out tax reform in the country is a job that involves "taming" the interests of collecting and distributing resources among the Union, states and municipalities.

The political scientist and professor at the Getúlio Vargas Foundation (FGV), Cláudio Couto, understands that the tax reform is “stuck”, in addition to being conditioned to “a bundle of interests”.

Couto, according to information from Agência Brasil, believes that it is possible that the next government will choose to carry out small reforms as they were done in the FHC and Lula periods.

"One-off reforms can be made, simplifying, resulting in cost reduction, such as reducing the bureaucracy necessary to pay taxes, with the hiring of accountants and lawyers", says the professor.