Tax Disinformation

The disinformation tournament is won by the announcement that a tax reform, whose scope is strictly unknown, will promote 10% growth

Everardo Maciel, chairman of the ETCO Advisory Board

It is indisputable that the Brazilian tax system has many problems, aggravated, moreover, by incomprehensible judicial decisions and legislative delays in relation to complementary laws, provided for in the 1988 Constitution and never enacted.

This framework facilitates the construction of fallacies, logical leaps and disinformation of all kinds.

It is pointed out, as evidence of the complexity of the tax system, the existence of different rates of IPI for perfumery products. If this were a problem, it was something that could be resolved with a modest decree.

Another piece of evidence, even used in an article published on the internet, is the case of crocs shoes. It is claimed that changes in the classification of these shoes resulted in tax assessments. Palmar error. The issue was not tax. It was about the application by the Foreign Trade Chamber (Camex) of anti-dumping duties on footwear imports from China. Furthermore, the classification had already generated controversy at the international level, having required specific deliberation at the World Customs Organization in Brussels.

The World Bank's Doing Business survey is repeatedly cited to justify tax reform projects, under the implausible allegation that paying taxes in Brazil required more than 2 hours a year. Apart from being a matter related to bureaucracy and not the nature of taxes, around 97% of taxpayers are Simples and presumed profit opters who fulfill their obligations very easily, thanks to the simplicity of the regimes and the efficient applications available. Moreover, the survey was “discontinued” by the Bank, in 2021, due to fraud and inconsistencies detected by an independent audit.

There is also talk of increasing revenue through the revocation of tax benefits. This claim, however, contains several pitfalls: the concept of tax waiver is not clear, which often includes situations arising from the constitutional precept of mandatory compliance, such as the taxation of micro and small companies; the extinction of a tax benefit may imply the closure of the benefited business, with no benefit for the collection; the National Tax Code prohibits the cancellation of a benefit given for a certain period and under conditions.

This disinformation tournament is won by the announcement that a tax reform, whose scope is strictly unknown, will promote a 10% growth in the Brazilian GDP, in 15 years. There are also those who believe in elves.