How he acts

Representatives of tax authorities, courts and injured companies tell how the default debtor makes tax defaults an illicit method of making money


The persistent debtor has a very peculiar way of acting. By not paying taxes, it sells its products cheaper than the competition and thus gains market quickly. He declares sales to the tax authorities, recognizing the tax debt. But it simply does not collect the values. His way of continuing to operate and illicitly profiting is completed with the use of all kinds of administrative and legal resources to postpone as much as possible the conclusion of the lawsuits filed against him. The battles fought in the courts can last for more than ten years, long enough for him to earn a lot of money, hide his profit, dispose of his assets and leave the company with an unpayable debt. To make matters worse, many times the person who appears as the official owner is an orange, that is, someone who simply lent his name to the business. The true owner leaves unscathed.

Tax authorities, the Judiciary and representatives of the business sector committed to business ethics have been joining in the challenge of identifying and combating the persistent debtor. The ETCO-Brazilian Institute of Competition Ethics has been a catalyst for this movement and held in November 2015 a seminar on the topic in partnership with the newspaper Valor Econômico. "The persistent debtor makes non-payment of taxes his own business and his competitive advantage, that is, he has been malicious since the composition of his activity", says Evandro Guimarães, president of ETCO.

In the following, experts talk about the advantages and the way of performance of the incumbent debtor.