"If nothing is done, it will get worse"
Tax attorney Everardo Maciel, president of the ETCO Advisory Council, discusses the causes and presents solutions for the pathology of the Brazilian tax process
In the assessment of tax attorney Everardo Maciel, president of the ETCO Advisory Council, the problem of tax litigation tends to worsen if the country's leaders are not aware of its seriousness. In his opinion, the issue is arid and politicians prefer themes that give more visibility, such as the change in the tax model. “The dimension, the magnitude, the persistence, the dysfunctionality, in short, the pathology of the tax process in Brazil, are striking,” he says.
The solutions, however, do not seem so difficult to achieve, as long as they start from the correct diagnosis. With the experience of those who commanded the Federal Revenue during the two terms of President Fernando Henrique Cardoso, between 1995 and 2002, he points out three major sources of litigation that need to be faced: the excessive freedom of the Tax Authorities to interpret tax rules and to assess taxpayers ; the endless legal demands, brought by taxpayers, on the constitutionality of tax rules, within the scope of what he calls “thesis industry”; and the lack of clarity of some legal concepts that provoke major legal disputes.
In this interview, he explains the three problems and presents the solutions he advocates for each of them. Its adoption, according to Everardo, would have the effect of turning off the tap that floods the administrative and judicial trial bodies of new cases all the time. But it would also be necessary to solve the problem of the high stock of litigation already formed - and for this issue he also presents a proposal: to allow the use of precatories, credits and accumulated losses to settle tax debts entered in active debt.
Below are the main excerpts from the interview.
ETCO Magazine: Federal tax litigation grew in five years from the equivalent of 42,7% to 50,4% of GDP, according to a survey conducted by the consultancy EY for ETCO. What to expect for the future?
Everardo Maciel: If nothing is done, it will inevitably get worse. This is what has been happening systematically over time. I think that there is still no clear awareness of the nature and extent of the problem. This issue has no political visibility. It is more charming, more elegant to talk about the creation of a new tax, claiming that it is adopted in developed countries, than to talk about procedural reforms, as it is a very arid and technical topic and, therefore, difficult to assimilate. They do not, therefore, have the necessary political appeal for them to prosper.
Our main tax problem is the process. Whatever the tax system, in the material aspect, if the process is dysfunctional, it will not work. It is clear that the incidence of taxes, therefore, tax jurisdiction, is an important matter. But the most relevant is the process. Especially in the Brazilian case, where the dimension, magnitude, persistence, dysfunctionality, in short, the pathology of the tax process is striking.
What are the reasons for the high level of tax litigation in Brazil?
Everardo Maciel: A litigiosidade tem dois aspectos a destacar. Primeiro, a origem do litígio: por que ele surge? Segundo, a resolução: como liquidar o litígio gerado? Vamos começar pela questão da origem. O litígio tributário tem basicamente três fontes: o Fisco, o contribuinte ou o conceito. O Fisco é fonte de litígio especialmente porque inexistem limites para os lançamentos de ofício. Se não existem restrições à lavratura de autos de infração, eles vão ocorrer. Porque o Fisco pode fazer qualquer autuação, sem que exista custo caso seja insubsistente. É o que chamo “lançamento sem ônus”.
In relation to the second source of litigation, the taxpayer, the reason is related to our model for controlling the constitutionality of tax matters. More specifically, with diffuse control, which allows any taxpayer to go to court to argue the constitutionality of a rule.
Why does diffuse control fuel litigation so much?
Everardo Maciel: Porque nossa Constituição contém uma extensão amazônica de matéria tributária. Para ter uma ideia, o capítulo sobre tributação tem mais que o dobro de palavras que toda a Constituição dos Estados Unidos, que não tem nem sequer uma palavra sobre tributos, ou seja, o contribuinte tem amplo espaço para questionar a matéria tributária no aspecto constitucional. Então, um contribuinte entra na Justiça contra determinada matéria e logra êxito na primeira instância. Seu concorrente ingressa com uma ação idêntica em outro juízo, mas perde. E ambos percorrem um longo caminho pela via recursal até o Supremo Tribunal Federal encerrar a questão, o que costuma demorar de dez a vinte anos. E nesse período o que perdeu tem que seguir recolhendo os tributos e o que venceu, não, numa clara ofensa ao princípio constitucional da isonomia tributária. E isso se faz acompanhar daquilo que eu chamo de “indústria das teses”, um termo elegante que implica tentar descobrir qualquer coisa que exista do lado do contribuinte em relação à qual se possa arguir inconstitucionalidade e, no final, ele não pagar os impostos. Isso no Brasil se tornou uma indústria.
And the third source of litigation, the concepts?
Everardo Maciel: São concepções muito indeterminadas ou ambíguas presentes na legislação tributária, que facultam, especialmente por parte do Fisco, a geração de litígios. São conceitos que têm, para usar uma expressão do meu amigo e companheiro do ETCO, professor Hamilton Dias de Souza, “baixa densidade normativa”. A rigor, não são muitos os casos realmente importantes. Entendo que existem três bastante relevantes e que merecem uma solução: o planejamento tributário abusivo, o ágio [valor que pode ser abatido do Imposto de Renda quando uma empresa adquire outra por valor superior ao de seu patrimônio líquido] e a hipótese de multa substitutiva de perdimento no caso de interposição fraudulenta no comércio exterior [punição severa que o Fisco aplica ao enquadrar como fraude o uso de intermediários em operações de importação e exportação]. São matérias extremamente relevantes na constituição de litígios, mas note: nenhuma delas guarda relação com a natureza do imposto.
So far, we have only talked about the origin of the disputes. But you said that the high litigation is also due to our system for resolving disputes
disputes. Does the current model need to be reformed?
Everardo Maciel: Dispute resolution has to do with all the administrative procedures that exist to resolve it - and our model needs extensive reform. But if I were to establish a hierarchy of importance, I would say that solving the causes that give rise to the disputes is more important than fixing the resolution procedures, because, allow me to use an everyday expression, it is useless to mop the floor with the tap open. If the process at its origin remains uncontrolled, however good the model that I may adopt for resolving conflicts, it will be ineffective due to the volume of disputes generated. Often, when trying to address this issue in Brazil, I see some attention to the resolution of the dispute, but almost no attention to the generation of the dispute.
How to solve these problems?
Everardo Maciel: Regarding the litigations originating from the tax administration, I believe in a solution that seeks to adjust to the present day ideas that were presented in the 1960s and 1970s by great tax experts, such as Rubens Gomes de Souza, Gilberto de Ulhôa Canto, Geraldo Ataliba and Gustavo Miguez de Mello. It consists of the integration of the administrative and the judicial tax process, which allows the losing party in the administrative litigation to appeal directly to the second instance of the Judiciary: the Federal Regional Court, in the case of federal taxes, or the Court of Justice, in the case of state and federal taxes. municipal.
Does it mean eliminating the first instance of the Judiciary?
Everardo Maciel: Not necessarily. If the taxpayer does not want to enter through the administrative route, he can enter through the judicial route, as it is today. But both would end up being directed to the same place. Because the appeal, both administrative and judicial at first instance, would flow into the court.
What are the main implications of this integration?
Everardo Maciel: First, it eliminates the constraint that currently prevents the tax administration from going to court when it loses the administrative proceeding. Second, it forces the loser to pay succumbence [the winning party's expenses with the process]. And with succumbence, there is now a limit to the launch, because if the launch is unsubstantiated, there will be a cost to the State. Thus, it combines authority with responsibility and prevents launch abuse.
Third, it eliminates the current requirement for taxpayers to make deposits or provide guarantees to discuss debt in court, something that is very costly for companies.
And, fourth, the integration of the process makes it possible to replace judicial enforcement with strictly administrative collection of tax credits. This would have an extraordinary effect on the functioning of the judiciary. Today, Brazil has about 80 million lawsuits in progress in the courts. Of this total, around 31 million, that is, 38% correspond to tax enforcement actions. Have you ever wondered what it means to take all that weight off the judiciary? It would be an almost revolutionary change from the point of view of the functioning of Brazilian Justice.
Is there a proposal to this effect under discussion in the country?
Everardo Maciel: This has already been tried to advance this in the Federal Senate with the Constitutional Amendment Proposal No. 112, of 2015, which originated in Operation Zelotes and the so-called CPI do Carf. This PEC, however, did not prosper, being filed, apparently, for our tendency to not deal with materials with a little more technical density, despite its relevance. But the general lines of this idea are there.
It would be necessary to change the structure of the body that handles administrative litigation, right?
Everardo Maciel: Yes. For this integration and the possibility of reviewing the administrative decision in court, it is necessary that the administrative litigation body enjoys administrative and financial autonomy. I defend the thesis that the filling of the positions of this body is done by public tender, that is, that we have independent administrative judges, who, contrary to what exists today, represent neither the tax authorities nor the taxpayers. And with vitality.
The integration must be accompanied by a constitutional provision of general rules for administrative and tax proceedings, regulated by a complementary law, and allowing the delegation of competence, in relation to this matter, from small municipalities to the States in which they are located. Today, 88% of Brazilian municipalities have less than 50 thousand inhabitants and, strictly speaking, do not have the necessary conditions to proceed with the collection, inspection and judgment of taxes. They should be allowed to delegate that competence to the state tax administration.
And disputes related to the diffuse control of constitutionality: how to resolve?
Everardo Maciel: I believe that this can be done through a change in Law No. 9.868 / 1999, which deals with concentrated control of constitutionality - one in which the questioning is made directly to the Supreme Federal Court. This law establishes the hypotheses for filing a Declaratory Constitutionality Action. Article 14, item 3, allows this type of action when there is a relevant judicial controversy. We would only need to add the following complement: “or relevant tax repercussion”.
Thus, it would not be necessary to wait for the processes involving theses to go all the way from the first instance to the Supreme Court in order to have a definitive solution. The Public Treasury, upon understanding that a certain matter has great fiscal relevance, could promptly file a Declaratory Action of Constitutionality in the STF.
What is the solution to the litigation that originates from poorly formulated concepts, such as the three you mentioned: abusive tax planning, goodwill on company acquisitions and illicit use of intermediaries in foreign trade?
Everardo Maciel: Each involves specific aspects that cannot be dealt with here, but the solution for these cases follows a general model. It consists of preparing a proposal for a tax transaction establishing a solution for the future, correcting the points of the current legislation that are generating controversy, and another for the past. And leave the taxpayer the right to choose whether or not to join this transaction.
By the way, what did you think of the tax transaction models approved by Law No. 13.988 / 2020, sanctioned in April?
Everardo Maciel: Sobre a solução de conflitos por negociação direta, no caso de solução individual, eu tenho dúvidas de que isso vá prosperar. E por quê? Sobretudo porque vai existir sempre uma espécie de insegurança por parte da autoridade tributária para implementar a transação. Há sempre a perspectiva de tomar uma decisão e depois ser alvo de investigação pelo Tribunal de Contas ou ação de improbidade por parte do Ministério Público. Porque uma solução desse tipo não é nada trivial. Quando a autoridade estabelecer um desconto para a dívida, restará sempre a possibilidade de que alguém diga: “ele fez errado, ele poderia ter sido mais duro”. E isso é impossível avaliar.
Já a chamada “transação temática” eu acho que não dá certo. A transação temática envolve necessariamente anistias. E a Constituição é absolutamente clara ao estabelecer que a anistia, assim como a remissão, a isenção, a redução de base de cálculo, só pode ser feita por lei específica que trate exclusivamente da matéria. Eu sou muito pessimista em relação ao sucesso dessa nova lei, mas espero que o meu pessimismo seja desautorizado pelos fatos.
What more important would need to be done to tackle the problem of litigation?
Everardo Maciel: The actions I talked about so far are basically about the flow, the prevention of new litigation, but we also need to face the problem of litigation stock. Cleaning measures are required in this stock. This can be done through a large offset between taxpayers' and the State's credits and debts. A possible solution would be to allow the taxpayer to use precatories, certified losses or accumulated credits, own or from third parties, to settle credits registered in active debt. If a company does not have its own credits, it can buy from third parties, giving liquidity to credits that today are illiquid. Someone may say, "But it will create a market". Yes. But sell whoever you want, buy whoever you want. With this measure, we would clear debts on both sides, reducing the volume of credits registered in active debt and also the debts of the State.