Lecture by Humberto Ávila on Legal Security, Taxation and Development
One of the greatest Brazilian scholars on the subject, with a doctorate in Germany and postdoctoral internships in that country and also at Harvard, in the United States, the professor of tax law Humberto Ávila, from USP, made a summary of the theses he presents in his lecture. in depth in his book Theory of Legal Security, of 744 pages, which the seminar coordinator, Everardo Maciel, defined as a “true treatise on the topic”.
He addressed three aspects that he considers essential for legal tax security. "There is security only when the right is understandable, stable and predictable," he said, attributing these factors to time.
Understanding concerns the present: "The right to be followed must be at least well understood".
Stability, with the passage from the past to the present. “The taxpayer who trusts the law yesterday cannot be betrayed by the law today. For this reason, the law protects the acquired right, the perfect legal act, the res judicata, the protection of trust, the consolidated situations, the preclusions, prescriptions, decadences ”, he exemplified.
Predictability refers to the transition from the present to the future. "The taxpayer, when he acts, needs at least to predict what are the consequences that will be applied in the future to the acts he practices in the present", he said.
Then, he pointed out the main problems that exist today in Brazil in these three dimensions. Humberto Ávila criticized the practice, common in the country, of not looking for the precise meaning of words and thus allowing for very elastic possibilities of interpretation. "There is no country in the world that is developed and in which words have no meaning," he warned.
Citing a recent decision by the United States Supreme Court, which directed the courts of that country to declare null the laws badly formulated by Congress, instead of trying to correct them, argued that a large part of the problems of legal insecurity seen in Brazil today are due to lack of determination by the Judiciary to demand more quality in Legislative decisions.
“Do you know why in Brazil the legislation is bad? Because the Federal Supreme Court does not declare the laws unconstitutional because they are bad, ”he said. “We have to recover the didactic role of the courts and start declaring the unconstitutionality of rules that are contradictory, that are too vague, too ambiguous. Because the taxpayer has to guide himself or his behavior based on some direction. ”
Humberto Ávila condemned the practice of federal entities to institute or increase taxes through regulations, and not laws, as required by the Constitution. He also criticized changes in orientation in jurisprudence that produce retroactive effects, violating taxpayers' rights.
At the end of the lecture, in conversation with Everardo Maciel, he drew attention to the risk that the country is taking with the institution of modulating the effects of judicial decisions to protect the state's finances. This legal figure, as is known, is used in cases in which the State suffers a judicial defeat that forces it to return large sums to taxpayers, usually in cases that take many years or even decades to be judged. Modulation seeks to make condemnation more flexible and reduce these values to minimize the effects on public coffers.
According to Humberto Ávila, this resource encourages the State to disregard the Constitution, which ends up benefiting financially from unconstitutional laws. “The right has many effects, one of which is to define what is right and what is wrong. Now, if the right is equal to the wrong, I wonder what kind of citizenship there will be in Brazil and what kind of exercise of public power there will be in Brazil ”, he pondered.
Following is the transcript of the lecture:Continue...
Lecture: Legal Security, Taxation and Development
Speaker: Humberto Avila
Curriculum (on 25/6/19): Doctor of Law (Munich, 2002), with postdoctoral internships in Law Theory (Harvard, 2006) and Tax Law (Heidelberg, 2007-2008; Bonn, 2008-2009), he serves as a full professor of Tax Law at the University of São Paulo (USP).
Good afternoon, everyone. First of all, I would like to thank you for the invitation that was given to me by my dear friend, Dr. Everardo Maciel.
As Dr. Everardo said, I have already dealt with this topic extensively in a 900-page book that I cannot summarize in a few minutes and it causes a certain distress to have so much to talk about in such a short time.
I will of course have to highlight some issues that seem to me more relevant on the topic, especially given that the topic has already been addressed by other speakers and, in my opinion, very well treated by them.
I think the first point to be highlighted is what legal security means. It is a topic that seems obvious, but it is not. I would just remind everyone that legal security can be security of the law, it can be security through the law, it can be security against the law, it can be security in the law.
Security alone can involve absolute determination of content, as can the predictability of processes, and so on ... So, it is a topic that is more complex than it may appear to be.
I usually deal with the topic in the simplest way possible, dividing it into three parts. And those are the three parts of my speech. There is security only when the right is  understandable,  stable and  predictable. So, there are, let's say, three perspectives that can be used to analyze the theme.
Or the perspective of the present: the right to be followed must be at least well understood.
The second perspective is the transition from the past to the present: the taxpayer who trusts the law yesterday cannot be betrayed by the law itself today. For this reason, the law protects the acquired right, the perfect legal act, the res judicata, the protection of trust, the consolidated situations, the preclusions, prescriptions, decadences.
And the perspective of the present for the future: the taxpayer, when he acts, needs at least to predict what are the consequences that will be applied in the future to the acts he practices in the present.
So these are three perspectives. The right has to be understandable, stable and predictable.
What needs to happen for the law to be understandable? It has to be minimally clear and minimally determined. And it is precisely here that we have several problems in Brazil. Unfortunately, there is a tradition of detachment from the meanings of words, and this detachment occurs both at the ordinary level - in people's daily lives - and at the technical level - in the legal rules and in the decisions that apply the rules.
On a daily basis, I ask everyone for permission to share with you a chronicle by Antonio Prata, entitled “A Pátria dos Ponteiros”:
One guy was talking to a German named Fritz, who traveled the world selling tomography machines. And then ask him: "Fritz, are you used to Brazil?"
He says: "I think I'm used to it, but there is something that bothers me, is when the Brazilian says 'I'm coming'. When he speaks to Brazilians and Brazilians he says 'I'm coming', I get up from the chair, look at the restaurant door and the Brazilian doesn't arrive. ”
Then he asks the interlocutor: “What does it mean, 'I'm coming'?
Then the guy, with that difficulty, says: “No, look, it's that ´I´m arriving´, it´s actually ´I´m leaving´. It is because the words in Brazil have more the meaning of the subject's will that employs them than the reality that he will express. ”
Then, he, Fritz asks: “What do you mean, then, ´I'm leaving´?[The interlocutor replies] "No, when the guy says he is going out, he has to take a shower, put on clothes to wash and give food to the dogs."
And then he says: “But I need to tell you one more thing. I need to explain to you what 15 minutes and 5 minutes means. ”
“15 minutes is the magic time that the subject arrives at the place. From Mooca to USP, 15 minutes. From Cantareira to Santo Amaro, 15. But it is an intention, that all signs are open, the cars are stopped and simply the streets are all open for the subject to arrive at the place. ”
“But 5 minutes is a slightly worse problem. Because ´5 minutes´ can mean not only 15 minutes, it can even mean days and there are people who were arriving in 5 minutes and until today they haven´t arrived. ”
And then the conversation ends when one guy looks at the other and says: we asked for feijoada in this bar a long time ago ...
He calls the waiter and says: "Wow, we ordered it a long time ago."
"Don't worry, buddy, it's coming."
Why do I tell this story? Because there is a daily use of words without them being charged with a guiding sense and this is somehow migrating to the scope of the application of law. Not for reasons of practicality, convenience or incompetence. But for theoretical reasons. There are those who understand that words have no meaning, there are those who understand that each case is a case and, therefore, despite the words having meaning, they should not be applied in all cases. And that defines the applicator.
So, how does a legal system work? A legal system works only if the words express meanings. The term meaning is a term used more simply to connote concepts.
What are concepts? They are meanings. And there is, incredible as it may seem, on the part of doctrine and on the part of the Judiciary the idea that the words would all be so indeterminate that they could not be the subject of a segment and this understanding needs to be revised.
And how can this be done? Well, giving the words their preliminary meaning, neither expanded nor restricted, only their strict meaning. This has been done continuously by the Federal Supreme Court.
When the Federal Supreme Court declared that the law that levied contributions on self-employed workers to be unconstitutional, it used the term salary with the meaning that was attributed for decades by labor law: as remuneration paid by the employer to its employee, considering the employee who maintains a regular subordination bond with your employer. All legal operators, when they read the word salary, receive this meaning.
The same thing happened with the Supreme Court when it decided on the expansion of the calculation base by law 9.718 in contributions on, then, billing. Billing was defined by legislation prior to the Constitution as the product of the sale of goods and the provision of services. Law operators, when they read that word, understood it that way.
And so there are many decisions of the Supreme in the same direction. What sense? Words are not hollow, they come loaded with meaning. But what sense? One that operators understand as consolidated.
Sometimes legislators expressly stipulate the meaning, but sometimes implicitly also define the meaning.
There is no country in the world that is developed and in which words have no meaning. There is no such possibility for a very simple reason: the taxpayer, he has to pay taxes. The taxes have a due date. By the end of the month the subject has to define what he will pay, what he will pay and how much he will pay. Of course, that decision can only depend on the applicable legislation. It will never be able to depend on a decision to be rendered twenty years later by a constitutional judge, based on that decision on the consequences that are supposed to result from the delivery of the decision.
Because the decision that will have to be made by the citizen is a decision based on legislation. So much so that what needs to be resumed here is the firm position of the Federal Supreme Court, which is losing its firm position.
I need to get my cell phone to read a U.S. Supreme Court ruling on June 24, 2019. Look how wonderful this court is. It is in English I will translate:
“In our constitutional order, a vague right is not even a right. Only elected representatives of the people in Congress have the power to establish new criminal laws. And when Congress exercises this power, it must write laws to warn ordinary people what the law demands of them. Vague laws violate both constitutional requirements. They give up responsibility for defining criminal behavior for unelected prosecutors and judges and leave the people unsafe to know what the consequences of their conduct will be.
When Congress enacts a vague law, the courts must, in the face of this new constitutional order, instead of improving the law, they must treat that law as void and impose on Congress to legislate again. ”
See how interesting. Do you know why in Brazil the legislation is bad? Because the Federal Supreme Court does not declare the laws unconstitutional because they are bad, that is why.
Do you know why administrative activity in Brazil is not so good? Because CARF validates absurdities. We have to recover the didactic role of the courts and begin to declare the unconstitutionality of rules that are contradictory, that are too vague, too ambiguous. Because the taxpayer has to guide himself or his behavior based on some direction.
If you have a rule that says go left and another rule that says go right. Or a rule that has a question mark, which is neither right nor left, neither up nor down, the taxpayer hesitates. And the taxpayer who hesitates is frightened, he does not invest because he is afraid of the consequences that will be linked to his actions in the future.
And here then we have a problem, we have to understand that legal certainty is a constitutional principle that determines clarity and determination. It may not be absolute, but there is a determination possible.
We know when a standard can be followed and when a standard cannot be followed. And when it cannot be followed solely on the basis of it, without the regulation, this rule has to be declared unconstitutional. To this day, I do not know of a law that has been declared unconstitutional by an excess of indeterminacy by the Federal Supreme Court.
Here we have a problem.
The American Supreme Court has already done it, the German constitutional court has already done it. But the Supreme Court, which loves to copy these cuts, did not.
What is the second problem? The second problem, related to the lack of clarity and the excessive indeterminacy of the rules, is the excess of non-legal rules. Our Constitution was masterfully written, it says: "No one is obliged to do or fail to do anything except under the law". This in the general plan, because in the tax plan it is even clearer and stronger: "The federated entities cannot institute or increase taxes without a law that establishes it". What is the "o"? It is to institute or increase. The law itself must define this. The law itself, never the regulation.
And there are regulations in Brazil that proliferate regardless of the law. We know that the compatibility of non-legal normative acts with the law can mean the absence of contradiction, authorization and binding. In Brazil, authors may not like this, but our Constitution has established a system of legal predetermination. And so much so that Article 84, item 4, says that the regulations serve to give faithful enforcement to the law. Do you want something clearer than that? Faithful enforcement of the law.
And how are there independent and autonomous regulations in Brazil? How does 1,700 normative instruction exist in Brazil, with 317 articles? Can not. And why doesn't the Judiciary declare everything unconstitutional? Do not know. There is something wrong with the books these people read or the books I’ve been reading, let’s give the benefit of the doubt.
So, here we have a problem. I lived in the USA to study, I lived in Germany to study. What exists there is a system of determination. It is not that words cannot have more than one meaning, they must sometimes have a meaning, which is different.
And then I'm not going to tire you out with regard to language theories, arguments, etc. But the words are loaded with meaning. So some skeptical ministers, who understand that interpretation can attribute any meaning to words, are completely wrong.
And this is having effects that contribute to legal uncertainty. Just look at the decision mentioned by Dr. Quiroga, the sense of what service - which for 30 years was understood as an obligation to do -, by the many, it was understood as an economic utility. Nothing has changed, only the decision of the Supreme Court understood it that way.
And what was the effect? It ended up taxing health insurance and insurance, which is the responsibility of the Federal Union by the IOF. Of course, the system could not be closed, given that the discrimination of competences is rigid and exclusive and exclusive.
What is the other aspect that I first drew everyone's attention to? It is the transition from the past to the present.
The taxpayer always acts based on the law. Based on forms, categories, normative types. And that is why he cannot, having relied on law in the past, be betrayed by law itself in the future. In such a way that, if there is a change, that change can be made, but it can only produce effects for the future. This is established with all the letters in article 146 of the National Tax Code.
Despite this, we all know changes in orientation that have been in effect since the beginning of the law, therefore, with retroactive effects.
So what is the idea of the stability of law? Is that the taxpayer can only act based on the law and he must, therefore, trust the permanence of the law in time and must trust that the legal effects attributed at the moment he practices the acts will be maintained in the future and not undone by a new one. law.
And here I make a point of mentioning a relationship that seems very relevant to me. That seems theoretical, but in fact it is as practical as possible, which is the relationship between this duty of trust in the law and dignity and freedom.
Just to give an example. Let's imagine that the teacher arrives on the first day of school and says: “All students gain presence if they arrive at 8 am.”
On the last day of class the teacher says: “I am changing the rule, only students who arrive here at 7 am will be present. And this rule has been valid since the beginning of the semester ”.
What's the problem? The problem is that citizens' conduct has already been practiced. Students cannot arrive earlier from the beginning of the semester, they can only arrive earlier in the following classes. Past classes have passed. The practices practiced have been exhausted.
In such a way that submitting students to a rule that did not exist at the time the conduct was practiced is not only deceiving students. It is surprising them with consequences that they, at the time of action, could not count on.
It is treating the individual as an object, not as a responsible and free being, who can adopt conduct X or conduct Y. And predict that if he adopts conduct X, he will have consequence A or if he adopts conduct Y, he will have consequence B.
Because if he adopts the conduct X waiting for A, but receives B, he is being surprised, deceived, he is being manipulated. He is being treated as an object, not as an autonomous and rational human being who deliberates about what he does by predicting the consequences that will be applied and responsibly assuming those consequences.
That is why, dear friends, that whenever the law is retroactive, whenever the acquired right is violated, a perfect legal act, res judicata or consolidated situations, it is not only a problem of legal security. It is a problem of human dignity. It is a problem of violating the fundamental right to freedom. And that, my dear, is extremely serious.
But it was not only serious because the fundamental right is violated, there is a problem related to development. If the subject cannot understand what the law establishes, he cannot predict the consequences that will be applied in the future and is afraid that what he did in the step (which was correct) will become incorrect in the present ..., who is it? going to invest in Brazil? Who is going to allocate money, time and human resources waiting for some return, if the subject cannot trust the greatest instrument of confidence in modern society, which is the law. Has no way.
So, you see, this takes on greater relevance when we talk, for example, about various issues of tax law such as a change in jurisprudence, which is a surprise to the taxpayer. I can mention dozens and dozens of examples, I will mention a few.
MP do Bem promised tax benefits for the chemical sector, for the export sector until 2018. All taxpayers invested, allocated their investment capacity thinking: the legislator promised that by 2018 I would have presumed credit, zero rate and so on . It is not that before 2018 arrives and, therefore, in the middle of the road, the legislator changes his mind and suppresses those tax benefits that had been granted for a fixed term and under condition.
There is no way to trust the law and no way to invest. This is not a new thing. This has been going on for a long time. The legislator promises, after the taxpayer goes there and acts and there is no turning back, the consequences attributed to the acts practiced in the past change, taking the taxpayer by surprise, taking him by storm. And the term seems to me to be adequate.
There has also been a lot of change in jurisprudence. And the change in jurisprudence, it ends up causing the same feeling of insecurity. But here, I don't know if I have that much time, but I would need to mention something that seems relevant to me.
All of this that we are examining concerns the so-called constitutional principle of legal certainty. The Tax Code specifies and implements this constitutional mandate in several of its provisions. Sometimes it does well. Sometimes not so well. It is necessary to understand the provisions of the National Tax Code as being explanatory, that is, they specify what is already contained in the Constitution. They, so to speak, rain in the wet.
Why am I saying this? Because article 178 of the National Tax Code says the following: that the exemption granted under a fixed term and under conditions is irrevocable. Then the tax authorities go there and say: “No, what you received is the reduction in the calculation base, it is presumed credit and it is a zero rate, but it is not an exemption”.
My friend: it is the promise. It's security. CTN specified, but specified poorly. Article 110 of the Tax Code thus says: that the tax legislator cannot alter concepts, institutes and forms of private law used by the Constitution, directly or indirectly, to define competences. It did not need 110. The tax legislator cannot change the Constitution. Why can't you change the Constitution? Because the Constitution is superior to the law. But the legislator, he said: cannot change the concept of private law. Then the tax authorities go there and say: “Public can. When you want, no problem. Because CTN said only private. Public can. ”
My God in heaven… Then article 100 of the CTN says like this: Whoever trusts in normative acts with normative efficacy, collegiate decisions and repeated administration practices cannot be punished nor can interest be charged, nor a fine.
Great. What if I trusted CARF's consolidated case law? Isn't it worth it? "Ah, it's not worth it, it's not written, is it?" So, this thought, I'm trying to be polite, there are ladies in the room, small, it has to be removed. CTN, by my count, is 95% explanatory. I didn't have to. You only need it in the positivist country where people only understand that it is the norm when it has express text. Then you need the cane to apply it. But a good enforcer of the Constitution would already solve everything on the basis of the Constitution.
And why is it that what I'm telling you is extremely important? Because all these benefits, which have been revoked, the revocation is being maintained by various sectors of the Judiciary because they are bound by the law. To the term that was used, without realizing that this CTN device is merely explanatory. It would be, more or less, how to interpret the Constitution in the following way. Article 150 states: It is prohibited to impose a tax with the effect of confiscation. "Saw? He only said tribute. Fine can, accessory obligation can. Because it only said tribute. ” No, my son, the main Western constitutions do not have this device and arrive at a better result than that due to the effectiveness of the core of fundamental rights.
So it is these difficulties that cause the law to end up not being applied properly. But it is not for lack of norm, you see. It is for lack of people who are able to properly transform these norms into decisions.
And finally, dear friends, there is this third dimension, which is the dimension of the present for the future. Legal certainty does not prevent the law from being modified. It just forbids it to be changed abruptly, from one hour to the next, and drastically, with an intensity that, suddenly, becomes a very different intensity.
So it is one thing to change the legislation by anticipating for the taxpayer that this change will be made and allowing him to adapt his particular activities to the new legal regime. It is another thing to change from one day to the next, taking the taxpayer by surprise, as if he were an enemy. "Look, I'll pay you, look".
And another issue is to change the legal regime in a very intense way, from one hour to the next. Then there are rate changes that change 300% from one day to the next, on the grounds that the President of the Republic can change the rates of taxes, IPI, IOF, import and export.
The President of the Republic can do this, but he cannot take the taxpayer in his hand. Can not. And why can't you? Because in the Constitution there is the principle of legal certainty that requires rules for the transition from a milder legal regime to a more onerous legal regime.
So what seems to me that maybe has to be done, and with that I will finish, is that we have to change this perspective of understanding that legal certainty is a formal principle that concerns how the rules are, let's say, made .
Is not it. We are talking about a principle that protects freedom. That protects how citizenship is exercised and that defines what kind of state we have. Who is the one who acts in the dead of night. That scares the taxpayer. That laughs, at acts that are irreversible. Or it is a state that respects private initiative, that respects free competition. It respects those who take risks, because in Brazil only a madman takes risks.
So, we are actually dealing with a principle, as Dr. Everardo Maciel these days, which is the principle of the principles. It is as if we had that metaphor of the scale, right. Usually that metaphor of the scale illustrates the weighing between principles. There is a principle on one side, another principle on the other and there is this weighing. Legal certainty is either the scale itself or at least the feet or material of the scale.
Therefore, legal security, it does not enter the balance, in such a way that it can be eventually discarded. And this from the theoretical point of view is important because there are some jurists, including the Federal Supreme Court, who understand that principle is that rule that people overload. And all of these rules are on an equal footing, so that in the face of a concrete case there is this weighing and one of the two can be discarded. Not legal security! Legal certainty is the principle of principles. It is that principle that instrumentalizes the validity and effectiveness of all others. For this reason, a Spanish jurist, many years living in Mexico due to the dictatorship, Recasens Siches, said: “There are all kinds of rights, even unfair rights, but there is no insecure right, because either the law is safe or it is not it's right ”.
So with those words, I thank everyone for their attention.
Question from Everardo Maciel to Humberto Ávila:
EVERARDO MACIEL: What do you have to say after this master class by Humberto Ávila? Well, I have a hard time asking questions and look, I prepared myself. I read his entire book and in fact I found nothing to comment on, just make a record here Humberto.
It was an article that I found very interesting by Celso Lafer, at Estadão, where it is centered exactly on his work. And he makes an observation, quoting economist Frank Knight, who is interesting to distinguish between risk and insecurity: risk implies the possibility to calculate, to evaluate, to measure. And insecurity is not. It is just that you cannot do any of this.
HUMBERTO ÁVILA: I would be tempted to say that the distinction he makes is between risk and uncertainty. You said insecurity. It is uncertainty. It is one thing to know that there is a margin within which the consequences will fall. Another is not knowing how to measure. It is not known whether the rate will be 10% to 20%. It can be any rate.
It is not known what will be paid. Whether it’s about this or that. You can pay for anything. Here, we get into a difficult issue, which is why I still think that the Judiciary has not properly understood its role and is concerned with other issues that are not the fundamental issues.
And here I will make a criticism with all the modesty possible and also with all due respect, but that seems important to me. There is an understanding by some ministers that the Supreme Federal Court should focus on the big issues. Civil liberties, same-sex union, marriage between people or a stable union between people of the same sex, issues related to discrimination, etc., which are these most rumorous cases of the Supreme Court. And that other minor issues, such as administrative and tax issues, should not even be the object of analysis by the Supreme Court.
If we analyze these tax cases as a matter of money, we can even understand this view that seems to me wrong, but if we understand tax law as an exercise of freedom and property, and development by the individual of his personality and the company of the exercise of the fundamental right of free exercise of economic activity, the meaning of tax law cases is completely changed. Nothing is done in the world without money. And the way people do it to get that money is what defines their personality.
I am going to remind everyone of a case that was tried by the German constitutional court, very interesting. I will tell the case not using German words, but in the most succinct way possible. The German federal legislator allowed the deduction of health and education expenses for individuals who had two or more children, not one. Taxpayers filed a lawsuit alleging unconstitutionality and their supreme declared it unconstitutional.
It's because? Because the tax law that should take ownership of the economic result was interfering with the way the economic result is developed. I was saying in other words how many children people had to have. And tax law has to be in its place, you can't get into that. If people are free to be their family, they must be free, therefore, to define how many children they have. And the tax law cannot indirectly influence how many children people will have or how they will form their family. Because family freedom is a fundamental right.
Where do I want to go with this? See a view that the constitutional court has on tax law, a completely different view. Tax law is a way of manifesting one's personality, it affects the exercise of fundamental rights that are very expensive for the constitution, it is a very serious thing.
And Brazil is only Brazil with the administrative law it has or no longer has. And with the tax law you have or no longer have. So this idea that an important case is a case involving civil freedom, are the other cases minor cases? Not at all. For example, and then I finish, modulation of effects, which was mentioned by Dr. Quiroga, is a very serious thing. Let's imagine a hypothetical case: the Federal Union institutes an income tax on something that is not known to be income. About compensation for, I don't know, emerging damage. The case takes twenty years to stand trial. He gets there in the end, because he has to pay a lot, the Federal Union asks for modulation of effects.
If the Supreme Court modulates the effects of this case, what will the federated entities think about in the future? What will the Union think about the future? Well, if I obey the Constitution and charge income tax on income, I keep the money, but if I break the Constitution and charge income tax on something that is not income, I also keep the money. Compliance with the Constitution and violation of the Constitution have the same legal qualification. Right is equal to wrong. The subject who violates the Constitution benefits from his own clumsiness.
And I ask: tomorrow, will you obey the Constitution to charge only on income or will you collect income tax on anything, because on income it doesn't have to be? So, see, this effect is an effect that destroys the legal system.
Why? Because the private, he acts by predicting that that constitutional norm has to be obeyed. And that if it is not disobeyed, the addicted acts will be null from the beginning. And the public authorities must know that if you violate the Constitution, you will never be able to gain from this illegal activity.
When the Supreme Court, until today, he did not, he made a marginal case, he modulated. But to this day it has not modulated. The day that the modular Supreme Court, for reasons not of legal security, but of money, will end the rule of law in Brazil. And the Supreme is swinging.
And there is a data that baffles me, check it out: ICMS on the PIS / Cofins calculation base. I know it is a controversial case, the Supreme Court judged unconstitutionality by a tight quorum of 6 to 4, but that decision was taken by the Supreme Court. Like it or not, it is the Supreme Court's decision. That already takes effect, according to the Supreme, despite the embargoes of declaration.
Very well. When did this case come to the Supreme Court? In 98, the first case arrived in 98. Minister Nelson Jobim asked for visas, he stayed for 2 or 3 years with the request for visas. Then Minister Gilmar Mendes spent 8 years with a request for a view. At that time, the Federal Union filed with ADC 18, trying to get the case to be tried by a new quorum, because there were ministers who had left, retired and even died.
The Supreme Court accepted to judge, but this case was shelved and was never tried. And then it was judged that in 2006 it was 6 to 1 for the taxpayer, ended up being judged in 2014 in favor of the taxpayer, 9 to 2. And the Supreme Court said: this case here has no general repercussion, we have to judge another one since the beginning. Okay, so the Supreme Court judged the other from the beginning in 2017. This decision, in effect, took, therefore, 20 years for the Supreme Court to define. And then what happens? The IRS produces that number 13 consultation solution defining that the value is one instead of the other, as the Supreme Court said, and things are not defined in Brazil.
But the point I want to make is the following: who took the time to judge? Was it the taxpayer that took? Will the taxpayer be punished for not getting back, because he has to return too much, and the longer it will take, he will have to return it? I keep asking: who is responsible for the delay?
Because here is a perverse fact. If the longer it takes, the more you will have to return and the more you charge the more you will have to return, then the more unconstitutional the law and the later the trial, the greater the chance of it being declared constitutional.
You see, the more unconstitutional the law, the greater the chance of it being declared constitutional. It is the inversion of the content of the law. Because the right has many effects, one of them is to define what is right and what is wrong. Now, if the right is equal to the wrong, I wonder what kind of citizenship there will be in Brazil and what kind of exercise of public power there will be in Brazil.
Because it is an indirect way that tax law has to show what kind of rule of law exists in Brazil. I think this is much more important than if it is going to be modular, not going to be modular. Because behind this question there is a question of the physiognomy of the Brazilian system. And the foreigner who looks - and the Brazilian who lives in Brazil - keeps thinking: gee, how am I going to contribute to the development of Brazil by investing, if I don't know what is right and what is wrong anymore. Has no way.