Interview with Victório de Marchi, advisor and one of the founders of ETCO

1. What is the importance of promoting competitive ethics for the country's development?

The business environment in Brazil and worldwide needs to be continually improved and guided by ethical conduct, not only in the relationship with employees, partners and customers, but also with the competition itself. The promotion of competitive ethics results in the confrontation of misconduct such as smuggling, forgery, evasion and tax evasion, for example. The equality of conditions in competitive practices helps to avoid losses not only to companies, but to the various levels of governments and Brazilian society as a whole.

 

2. How do you see ETCO's contribution to improving the business environment in these almost 20 years of operation?

I am proud to be one of the founders and former chairman of the ETCO Board of Directors. I remember the first movements around the idea, in 2002, when some sectors got together to assess how it would be possible to improve the business environment in our country, as there were many competition deviations.

In these 20 years, ETCO has consolidated itself as a reference source in the defense of a fair market, in which all its agents can have equal conditions in competitive practices.

I can cite as an example, the fundamental participation of ETCO, in the approval of article 146 A of the Brazilian Constitution, which authorizes the creation, through a complementary law, of special taxation criteria with the objective of preventing competition imbalances. Another example was the creation of the Underground Economy Index, which measures the size of informality in the country and is a safe source for the development of public policies aimed at reducing informality. More recently, ETCO financed a study on Brazilian Tax Litigation, which identified, among other points, the need for Tax Transactions and the expansion of Mediation and Arbitration instruments, as ways to reduce this problem.

3. And what would be the challenges for the coming years?

The achievements accumulated by ETCO are very important and must be celebrated, but there are still many other causes for which the Institute must continue to fight. Among them, the reduction of the Brazilian tax burden and the establishment of special taxation criteria to prevent imbalances in competition and the reduction of the period of legal discussions in the country - which take, on average, 17 years, generating huge liabilities for the private sector .

Fighting the debtor is essential in times of crisis

I must, do not deny, and do not pay! This is the motto of the so-called “hard debtor”, an unethical entrepreneur who, unlike the eventual debtor, fails to collect taxes systematically, with the premeditated intention of obtaining competitive advantage, generating
thus competitive imbalances.

As inefficient entrepreneurs, who only work by not paying taxes, they generate a (illegal) benefit and only survive on the basis of an artificially achieved cost.

In sectors with a high tax burden (fuels, cigarettes, beverages and medicines), of immediate consumption and low margin of return, the fact of not paying taxes gives the debtor entrepreneur an abysmal competitive advantage.

Just to give you an idea, on a pack of cigarettes sold at R $ 3, taxes reach R $ 2. Similarly, on a liter of gasoline C, whose cost to the final consumer is around R $ 3,50 , 2, the Treasury gets R $ XNUMX.

A question always arises when discussing this issue: how do these companies remain for so long on the margins of legality? Despite the evident absurdity, the explanation is simple. The regular debtor needs tax litigation with the tax authorities to extend his stay in the market. Discuss and rediscuss in administrative and judicial proceedings,
sponsors smoky legal theses that confuse justice and public prosecutors.

In a time of economic crisis and large collection deficit, combating the debtor is a necessity to stop the bleeding of non-payment of taxes in sectors with high default rates. Among the country's 500 largest debtors, there are several that
accumulate debts above R $ 1 billion.

They use and abuse the slowness of Justice, the bureaucracy of tax authorities, using the traditional jurisprudence of the Supreme Federal Court that prohibits the Public Power from applying political sanctions to collect taxes. Such precedents come from a time when there was only the figure of the eventual debtor, the one who fails to pay taxes for a momentary, temporary difficulty, whose overcoming puts him back to normal. In this case, an installment program generates positive results.

The debtor often acts contrary to ethics. Failing to pay the tax debt is part of the deal. The loss of tax revenue to the tax authorities is permanent, it will never recover. The assets of these companies, normally hidden in the name of "oranges", feed corruption, organized crime and money laundering.

The STF's traditional jurisprudence on the prohibition of political sanctions for collection of fees is not applicable in cases of regular debtors. A new chapter opens. In a specific case analysis, the Supreme Court has already understood the
of a cigarette company with large tax debts, thus determining the end of its activities.

In such cases, there is a need to block the business function or to collect taxes in advance. The benefit of the State comes with the preservation of the tax collection. That of society, with an ethical business environment.
In a period of national life when the three levels of government are struggling with a lack of resources, a different look at the debtor is urgently needed.

Tax authorities, prosecutors, the Public Ministry and, especially, magistrates need to be aware of this modern phenomenon. To combat it, we must go beyond the traditional application of tax law. It is essential to preserve competitive ethics and
protect the state.
LUCIANO DE SOUZA GODOY, former federal judge, doctor of civil law from USP, is a lawyer and professor at the São Paulo Law School at Fundação Getulio Vargas

 

Source: Folha de São Paulo (19/07)