Source: BandNews FM - SP, 06/07/2009

The ICMS tax substitution for the beginning of the production chain is a burden on the producer, but it is an efficient instrument to combat tax evasion. The opinion is of the economist Delfim Netto, who believes that the change did not have a great impact on the prices of the products. With the change, the Tax on Circulation of Goods and Services for the entire process of production and sale of the product is mandatorily paid by the industry. The industry can increase the value of the product to offset this payment.

The tax substitution caused the government of São Paulo to increase the collection this year by almost R $ 3 billion. Former Finance Minister Delfim Netto believes that growth is mainly caused by the end of tax evasion. Last week, the minister of Fazanda Guido Mantega criticized the states that carried out the so-called tax substitution. For him, the change in the collection of ICMS did not allow the drop in the prices of products benefited by the reduction of the IPI, the Tax on Industrialized Products.