Under the coordination of the Commercial Association of São Paulo, the project gathers suggestions to adapt the legislation to the current demands of Brazil

The Brazilian Institute of Competition Ethics (ETCO) is one of the entities responsible for preparing the proposal for the Simplification and Rationalization Program for the Tax System delivered on May 6 to President Dilma Rousseff, during the inauguration ceremony of the new presidency of the Associação Comercial de São Paulo (ACSP) and the Federation of Trade Associations of the State of São Paulo (Facesp).

Coordinated by ACSP, the program is the result of the actions of a working group composed of ETCO, the Federation of Trade in Goods, Services and Tourism of the State of São Paulo (Fecomercio-SP) and the Union of Accounting Service Companies, Advisory, Expertise , Information and Research of the State of São Paulo (Sescon-SP).

The initiative comprises a set of rules to improve the Brazilian tax system, including a proposal for a constitutional amendment (PEC), a preliminary draft law (PLC) and a preliminary draft law (PL). The three measures are connected and serve to simplify and streamline processes, provide greater legal certainty, change some provisions of the National Tax Code and adapt the legislation to the current demands of Brazil.

This initiative was made in line with the intention, expressed by the President in her inauguration speech, to modernize the Brazilian tax system based on the pillars of simplification and rationalization.

For ETCO's Executive President, Roberto Abdenur, “the complexity of the Brazilian tax system is today one of the main motivators of tax evasion and informality that hamper the process of formalizing the economy and, ultimately, the country's development”. He also recalls the impact on the collection by governments of resources that should be used in more investments in infrastructure and services to the population. “Simplifying and rationalizing the Brazilian tax system is one of the most urgent initiatives in order to reach higher stages in the process of inserting Brazil in the world economic scenario”, says Abdenur.

Among the measures suggested in the PEC are to prohibit the collection of taxes before six months of the law that instituted or expanded them (currently the term is 90 days). In the draft law, there are actions such as the regulation of financing and refinancing of tax debts, amnesty restrictions, so that this type of benefit is granted only in cases of calamities and debts of small value, and the obligation of the Public Treasury to publish, in the previous year, the selection criteria for the annual Individual Income Tax return, among others.