Interview granted to ETCO's electronic bulletin (August 2011)

1) To what extent does the modernization of the country's political and economic institutions and customs depend on state reform? Is Brazil prepared for this reform?

Modernization of political institutions and customs, on the one hand, and state reform, on the other, must necessarily evolve in parallel, or better, convergingly. Machiavelli already commented that good customs demanded good laws, while good laws presupposed good customs. There is a positive feedback between political-institutional modernization and State reform, in such a way that it is important to reap the natural fruits of this synergy, instead of adopting a sequential approach. This does not mean, however, that these reforms, even if simultaneous, cannot and should not be gradual, as the search for a general and immediate solution has no basis in the real world and ignores the pineapples that have to be peeled, whenever possible without waiting for a unique and grandiose solution, an unrealistic expectation. It is necessary, that is, firmness of purpose and perseverance in the chosen process, with the corrections of course that the change of winds imposes.

2) Despite having its participation in the economy gradually reduced over the last few years, underground activity is still a significant part of the Brazilian GDP. In this latest survey, it was estimated at 18,3%. Are there reasons to celebrate?

An 18,3% share of the underground economy is still a high number, mainly because the absolute number, of R $ 663 billion, corresponds roughly to Argentina's product. The underground economy has gradually and discretely reduced its participation in our Product, which has grown a lot in the last 4 semesters. But this process will also be less traumatic and more permanent if one does not try to advance by somersaults. Alluvial, cumulative advances are worth, as San Tiago recalled, than rapid advances followed by painful setbacks.

3) Today, when it comes to tax evasion, it is immediately associated with high tax burden However, much is also said about the large bureaucracy surrounding the payment of taxes as a preponderant factor in the equation that results in tax evasion. How do you analyze this issue? Is the magic tax reform solution viable?

This field, like any other field that concerns the economic and political peculiarities of countries, does not require or include magical solutions. This is even more true in relation to the long-awaited and necessary tax reform that will deal with a technically extremely complex reality, in addition to assuming the harmonization of very different party, economic and federative interests, a difficult task.

This requires, therefore, a careful gradualist approach, which step by step, advance in areas around which it is possible to mobilize a minimum consensus and in which there is no danger of setbacks, what the Americans call no regrets approach. What is important to emphasize is that most of the advances can be achieved through infraconstitutional remedies, including those related to the suffocating bureaucracy to which the good taxpayer is submitted.

Marcílio Marques Moreira is president of the ETCO Advisory Board