Tag: Fight against the debtor

What is the Contumaz Debtor, the damage that this type of debtor does to the country and how should we combat it.

Senate Bill provides for combating persistent debtor

At the moment when the implementation of a new Refis, for the renegotiation of companies' debts, is being evaluated, the discussion about the search for compensatory measures arises.

In this sense, there is an initiative ready to be voted by the plenary of the Federal Senate that will allow the combating the debtor, which bleeds the federal coffers in the order of R$ 14 billion a year, just in the fuel market. It is PLS 284/17 that provides, among a series of measures, for the objective distinction between debtors: the eventual debtor e the reiterated debtor (who will not be affected by said PLS) and the persistent debtor, this yes, must be fought, therefore, it is structured intentionally to not pay the taxes due.

To get an idea of ​​liabilities, also in the fuel sector, active debts reach R$ 70 billion. Which corresponds, for example, to 8% of the GDP of Minas Gerais last year.

O PLS 284 / 17 was reported by Senator Fabiano Contarato (PT-ES) and was approved by several commissions and now it only depends on the President of the Federal Senate, Rodrigo Pacheco (PSD-MG) to move forward and be guided. The delay in approving this project encourages the stubborn debtor, harming public coffers and society as a whole.

For the president of ETCO (Brazilian Institute of Ethics in Competition), Edson Vismona, who follows the course of the agenda in Congress, the great challenge of the Brazilian legal system is distinguish the defaulter from the defaulter. “Contumacious is not a taxpayer, he is a criminal, as he practices fraud in the exercise of his activities. Delinquents, on the other hand, want to be up to date, but due to different circumstances they are unable to meet their tax obligations, this one deserves the government's attention and encouragement for its regularization, on the other hand, persistent debtors must be rejected”, he says.

I must, I don't deny it, but I don't pay.

The title of this article may seem like a joke to the reader, but it actually reveals how tax litigation can be dealt with in Brazil.

To illustrate, I recall a case widely publicized in the media of a brewery in Rio de Janeiro that, according to the Attorney General's Office, has a debt of R $ 1,2 billion in ICMS and is trying to benefit from a state law that allows special installments. The first instance approved the installment plan in more than two thousand years!

Without going into merit, this age-old extension of a tax debt is reminiscent of the modus operandi of the so-called incumbent debtor in which the company structures itself so as not to pay taxes and uses all administrative and judicial means to postpone payment indefinitely. By not paying taxes, your profit margin is multiplied and you can offer products at much lower prices, destroying fair competition.

The amounts owed are billionaires and paid by those who complete. In the fuel sector alone, liabilities are R $ 60 billion and in cigarettes, R $ 24.7 billion. A subversion of the popular saying “I must, I do not deny, I do not pay”.

It is evident that the Brazilian tax system presents itself in a chaotic way, there are so many rules, decrees that make possible the most diverse interpretations and in this way, make the life of the taxpayer who has declared equity and regular activity, much more difficult than that that acts by exercising its activities in the shadows.

It is certain that we have to face this challenge by simplifying the tax system, facilitating and stimulating the activity of the regular taxpayer and making it difficult and diminishing the space of the contumacados. In this sense, we have stopped since March 2019 in the Federal Senate and ready to be voted, PLS 284/17 - accurately defining what is a regular debtor, differentiating it from an eventual and repeated debtor and ensuring more effective measures for the tax authorities to act.

So we have, on the one hand, the complex tax system that creates obstacles for taxpayers, resulting in unbelievable figures (study sponsored by the ETCO Institute with the international consultancy EY it indicates that tax litigation in Brazil is R $ 3.4 trillion) and, on the other hand, this chaos helps those who want to postpone the payment of taxes indefinitely. This situation causes legal uncertainty and removes investments, which must be urgently reversed.

Going back to the law that allows this installment of biblical extension, we have a picture of the consequences that some legislative initiatives can have. Thus, limiting the value of benefits could be a defensible measure, but, in fact, good intentions can generate anachronistic result. The risk and effects analysis must always be in-depth.

In view of this transaction possibility, it is possible that a reconciliation may be proposed, reducing the installments to five hundred years. Yeah, it sounds like a joke, but it is obvious.

Being legal in Brazil cannot be an option

Individuals and legal entities, in Brazil, experience daily difficulties arising from non-compliance with laws. This theme is directly linked to one of the fundamentals of the country's own development, legal security.

Public authorities have a duty to respect and ensure that the Federal Constitution is respected. No one is above your principles. The attraction of investments, with the generation of jobs and income, depends on the certainty that all market agents will respect the same rules, that the rights and contracts will be respected. The State should, on the one hand, facilitate the lives of those who want to act correctly and, on the other hand, combat those who break the law. Obvious concepts, however, the way to guarantee this normal reality in a Republic is not simple.

The necessary compliance with laws, decrees, regulations in any area can be a real pain. The hardships of those who want to start a business are evident, getting a mere living in a house, obtaining operating licenses from a store, following the overflowing tax legislation or the fluctuating interpretations of the courts.

In parallel, we have the advance of illegal practices in the market: smuggling, piracy, counterfeiting, fraud, under-invoicing, non-compliance with technical regulations, evasion, acts that distort competition and pervert the business environment.

This picture is worrying. Companies that fulfill their obligations have to compete with those who seek illicit advantages, which are structured to circumvent all rules and thus conquer the market, raising their profit margins in a totally irregular way, at the expense of the whole society.

The results are impressive. The illegal market (fifteen productive sectors), according to data from the FNCP - National Forum Against Piracy and Illegality -, generated R $ 2019 billion in 291,4. Regular debtors, which are structured with the objective of not paying taxes, accumulate more than R $ 60 billion in debt.

However, these billionaire losses are much greater, reach intangible values, as they erode the belief that crime does not pay, discourage new investments and erode ethical principles.

To change this situation, impunity must be faced; and compliance with laws, valued. Some suggestions:

Laws that discipline conduct with clarity and objectivity. And that they are applied effectively, reducing the space, not for the legitimate exercise of broad defense, but for merely postponing attitudes, which benefit those who wish to save time and, thus, continue to gain advantages and profits;

The initiatives of the productive sectors to denounce illegal practices in the market must be considered by the public agents as an important support for the necessary corrective actions, which must be seen as relevant and not as an interference in the normal work rhythm;

Encourage cooperation and integration between public administration entities, with the participation of civil society, which can assist with information that facilitates and streamlines the work to contain illegality;

Fight corruption without respite, punishing those who dishonor the public service. It is true that this is the only “tax” paid by lawbreakers;

Simplification of administrative procedures and legislation, especially taxation, so that it is easier to comply with the law than to ignore it;

These proposals are known, but there is resistance. Combating illegality is not as natural as it should be.

An example of this hostile behavior was given by the Senate's public consultation on bills. The proposal to punish TV signal piracy was rejected by 95% of the demonstrations.

This brief overview exposes some of the obstacles of the so-called “doing business” presented by the World Bank (from 190 countries Brazil is in 124th position) and which, for a long time, have been debated, however, every year we postpone the necessary measures and this delay hinders our development.

In fact, being legal in Brazil cannot be an option; it is a duty to stop being the “country of the future” that never arrives.

Cancellation of registration of defaulting smoking companies back on the STF's agenda

 

The Supreme Federal Court (STF) again discusses, this Thursday (17/9), the possibility of canceling the registration of smoking companies due to the non-recurring payment of taxes. This is one of the most important issues among those guided by the new President of the Court, Luiz Fux, until the end of the year.

In September 2018, the plenary of the Supreme Court addressed the issue. Eight ministers understood the revocation of registration to be constitutional, but, at the time, there were three different lines of reasoning or argument aligned with this view.

In view of the complexity of the discussion in a case that has been pending before the Court for 13 years and has already accumulated eight volumes, Minister Carmen Lúcia, then President, postponed the announcement of the result. Now, the expectation is that Cármen Lúcia's vote will be understood as the medium and give the contours to the proclamation.

The direct action of unconstitutionality (ADI) 3952 came back to the plenary agenda on October 19, 2019 and March 12, 2020, but ended up not being proclaimed. In view of the repeated postponements, the Court began to receive requests for the proclamation to be concluded soon.

The lawsuit, filed by the Christian Labor Party (PTC), challenges the “summary cancellation” by the Federal Revenue of the special registration of tobacco companies when there is a default of federal taxes. The party claimed that the restriction to the exercise of lawful economic or professional activity would constitute a political sanction prohibited by the Constitution, insofar as it does not admit the existence of “oblique instruments” to coerce or induce the taxpayer to pay taxes.

In summary, it claimed that Article 2 of Decree-Law No. 1.593 / 77, as amended by Law 9.822 / 1999, would violate the constitutional principles of due legal process, wide-ranging defense, contradictory, presumption of innocence, freedom initiative and proportionality. According to the party, the sanction imposed on cigarette companies would not achieve the desired end, which is the payment of taxes or contributions.

Edson Vismona, executive president of the Brazilian Institute of Ethics in Competition (ETCO), which is amicus curiae in the lawsuit, argues that, in fact, impeachment is an appropriate measure for those who, according to him, structure an enterprise in order to harm the Tax authorities to profit. To the extent that they do so, there should be no possibility of recovering the tax due.

“It has debtors with debts of millions. The corrosive action of the heavy debtor is very clear. And you can no longer delay. And that is the preferred verb of the debtor. he exists to delay, to have no decision, to forfeit and he remains free and free, to continue to evade. Cassation is important because it prevents the continuation of a criminal offense and affects all competition ”, emphasizes Vismona.

Contumable debtor is the company that claims to have a tax debt, but in a repeated and premeditated way does not act to settle it. As the entrepreneur does not evade, he just does not pay the tax due, in theory, he does not commit a crime. But, it leaves the competition behind, since the non-payment of taxes positively impacts the price of the products, which are artificially cheaper.

The work to recover the amounts due is, according to Vismona, herculean. And over time, it tends to get even more difficult. “It is an ongoing process for the tax authorities. The cassation does not prevent the action from being repeated, because these groups open new CNPJs, they have a structure around that. But we have to surround them, reduce the space they have. ”

The final definition of ADI 3.952 consolidates an important precedent and, in ETCO's view, strengthens the work of Congress to legislate on combating persistent debtors. Two bills in process in Congress contain criteria to detect and punish companies that use this practice: PLS 284/2017 and PL 1646/2019. The first, for example, differentiates the incumbent debtor from the eventual - just one of the concerns of those who follow the debate. But in Parliament, the discussion is stopped.

The constitutionalist lawyer and professor at the State University of Rio de Janeiro (Uerj) Gustavo Binenbojm works in the cause for the Tobacco Industry Union in the State of Rio Grande do Sul (Sindifumo-RS). According to him, "the cassation takes place in the face of the special circumstance that this is an industry that the taxation is so high that it is not enough for the tax authorities to have at their disposal the traditional instruments for collection, attachment of assets".

In these cases, evaluates Binenbojm, what we have is the constitution of companies that live off tax evasion and “through it distort the market because they offer values ​​much lower than those economically viable for fair competition”.

Thus, the commercial damage caused by the action is irreversible. In this context, the fact would not fit into the jurisprudence of the Supreme Court of not allowing what is called a political sanction. As a rule, extra-fiscal effects are not allowed for non-payment of tax. But in this case, the understanding is that the State has no other means to combat the practice.

“Law works based on reality. It is not a philosophical abstraction. The argument that if you close the company, right there is that you will not be able to pay does not arise with companies that open and close and create new CNPJs to practice the same illegal act. The only way to stop bleeding and prevent further damage is to prevent the action from continuing, ”he said.

Binenbojm recalls the case where the Supreme Court authorized arrest for ICMS debt declared but not paid. “Now it does not involve deprivation of freedom. But the person's right to engage in economic activity or not. If the STF validated the arrest, much more serious, for a greater reason it must validate the revocation of the registration of companies with an inherently unlawful intention ”, he points out.

At the end of 2019, the plenary of the Supreme Court, by seven votes to three, defined the thesis that the taxpayer who fails to collect the ICMS practices crime as long as there is intent and in a persistent manner. On that occasion, the Court judged RHC 163.334 filed by the owners of clothing stores in Santa Catarina denounced for not collecting ICMS between 2008 and 2010. The vote of the rapporteur, Minister Luís Roberto Barroso, which included the criterion of contumacy for the construction of the proposed thesis - changing the initial suggestion, without the expression.

Voting chains

The trial started in 2010 and was suspended after Cármen Lúcia's request for a view. On the occasion, the rapporteur, Minister Joaquim Barbosa, voted for the partial provision of ADI, in order to give the contested normative provisions an interpretation according to the Federal Constitution, establishing the following conditions for the revocation of the registration of companies to take place: analysis of the amount of tax debts not paid off; meeting the due tax administrative process in assessing the enforceability of tax obligations and examining compliance with the due legal process for applying the sanction.

Cármen Lúcia accompanied Barbosa. According to the minister, this interpretation "equalizes the principles of free legal economic initiative, free competition, reconciling with the guarantee of the due tax legal process and the non-avoidability of the jurisdiction, with the taxpayer's duty to fulfill his tax obligations". Minister Rosa Weber and Minister Celso de Mello accompanied this same understanding.

Minister Alexandre de Moraes defended that the company should continue functioning until the secretary of the Federal Revenue Service judges the appeal presented by it. Thus, he voted to exclude the expression “without suspensive effect” in paragraph 5 of article 2 of the rule, maintaining the rest of the law. According to the minister, the rule, with the changes made by the new legislation (Law 12.715 / 2012), provides for the conditions proposed by the action's rapporteur. Ministers Ricardo Lewandowski and Gilmar Mendes followed the current opened by Moraes.

A third line was opened by Fux. He affirmed that the legislator's option must be obeyed and voted for the rejection of the request. "If the legislator understood that the measure has to be severe, he has better expertise than ours to know if a suspensive effect does not postpone an illegal activity". In addition, for Fux, the measure to cancel the registration does not permanently impede the company's economic activity, which can be established as long as the legal requirements are met. “Freedom of initiative when exercised in an abusive manner no longer deserves the protection of the legal system”, he concluded.

The only one to vote for the total validity of the PTC request, and consequently against the constitutionality of the impeachment of company records, Minister Marco Aurélio stressed that the contested rule compels the company liable to pay the tax, regardless of the amount due, to the satisfaction of the tax debt . “The precept does not refer to eventual, repeated or repeated debtor, there is no distinction. The attacked device is content to arrive at this extreme act of forfeiting the registration, with pure and simple default, ”he said.

Ministers Dias Toffoli and Luís Roberto Barroso declared themselves impeded and Minister Luiz Edson Fachin did not vote for having assumed Barbosa's chair.

Experts defend special taxation to fight tax evasion companies

The Commission on Transparency, Inspection and Control and Consumer Protection (CTFC) held this Wednesday (5) public hearing on the project that creates special taxation to avoid imbalances in competition and combat tax evasion.

The proposal (PLS 284 / 2017) establishes punishment for those who fail to pay taxes to obtain a competitive advantage. Senator Ana Amélia (PP-RS), author of the text, said that unfair competition could have an impact on the prices of products and services and unbalance the market.

The executive president of the Brazilian Institute of Ethics in Competition (ETCO), Edson Vismona, gave examples of those who lose with unfair competition.

- We are defending the purse. The sectors that participate in ETCO are severely affected by any evasion practice, because they are major contributors. With the illicit market, consumers lose and the legal market loses, which has to compete absolutely disproportionately with the brutal tax evasion and tax evasion - he said.

The specialist lawyer of the National Confederation of Industry (CNI), Gustavo do Amaral, highlighted how disloyalty harms the economy.

- Whoever bought the beer, the soda, the cigarette, whatever product, without paying taxes, stopped buying the other one and will not renew this purchase - he said.

Senator Ricardo Ferraço (PSDB-ES) defended Ana Amélia's project. According to him, the text establishes duties for the State and rights for the taxpayer, correcting a flaw in the legislation: the absence of a legal framework that makes competitive ethics prevail.

Source: Agência Senado (05/12/2018)

The destructive debtors' business strategy

In an article published on Portal Jota, ETCO's president talks about the judgment of ADI 3952, which may authorize the operation of persistent tax debtors

If ADI is validated by the STF, society and companies that operate legally would continue to be harmed

The tax burden on cigarettes in Brazil is quite high, ranging from 70% to almost 90% in some states. This is a highly regulated sector, and companies that operate legally in the country must strictly comply with all standards that guide the manufacture of the product in the country.

The manufacture and sale of tobacco products are governed by Decree-Law 1.593 / 77, which among other rules requires the Federal Revenue to install a system called Scorpios in the factories, which accompanies on the spotthe production. In addition, there is a need for prior authorization from the farm authority for the production of cigarettes, called special registration, which, among other requirements, requires proof of the company's full fiscal regularity.

Despite the intense work carried out by the authorities to properly regulate the sector, over time a group of companies started to adopt tax evasion as a business strategy. We are not talking here about companies that eventually fail to collect taxes due to specific problems, but about a method adopted purely and simply so that it is possible to gain competitiveness through non-payment of taxes. To stay in business, these companies operate by burdening public coffers and undermining free competition in the sector.

It is estimated that the set of taxes owed by the main debtors in the tobacco sector is greater than R $ 32 billion. In addition to evading taxes, these persistent debtors also practice other illicit acts such as counterfeiting tax control seals, non-compliance with regulatory rules on the production, import and sale of cigarettes and other tobacco products.

The Federal Revenue Service, supported by previous decisions of the Supreme Federal Court, has acted to revoke the special registration of companies that, evidently, evade taxes on a recurring basis. The STF has already manifested itself in some opportunities in order to keep the tax evading company contagious with its suspended activities.

But a Direct Action of Unconstitutionality, which has been in progress since 2010, must be voted on the 5th of September at the STF. ADI 3952, proposed by the Christian Labor Party (PTC), disputes changes in the legislation that allowed the cancellation of the special registration to which tobacco companies in the country are subject when it is verified by the Federal Revenue Secretary that a certain company is not fulfilling its obligations tax.

If the ADI is validated by the STF, prohibiting the cancellation of the registration of these debtors, both society and companies that operate legally would continue to be harmed, investing in the country, collecting taxes and generating employment and income. The decision of the ministers must take into account the interests of the country, and not false entrepreneurs who operate outside the law.

EDSON VIMONA - President of the Brazilian Institute of Competition Ethics (ETCO) and of the National Forum Against Piracy and Illegality (FNCP)

 

Article published on 03/09/2018 in Jota Portal

 

The new enemy No. 1 of hard-hitting tax debtors

Senator Ana Amélia talks about her Bill to fight companies that use tax defaults to win the market

 

ANA BIG INTERNAL AMELIA

They act this way in a systematic way, differentiating themselves, therefore, from that taxpayer who, in a difficult moment, fails to collect taxes, but shows an intention to regularize his situation.

Tax evasion in Brazil is a crime. The guilty can even go to prison. There is, however, a practice that causes practically the same losses as tax evasion, but it is not considered a crime and its fight has been very difficult in the country. This is the usual tax default, which occurs when the company informs its sales to the tax authorities , but simply does not pay taxes.

The consumptive debtor benefits from the lack of specific legal instruments to combat it and from the slowness of Justice to drag collection proceedings for years - often by working through oranges that, when the shares are definitively lost, have no equity to settle debts that millionaires. Meanwhile, it uses the advantage of unpaid tax to lower its prices and conquer the market at the expense of honest competitors, destabilizing the market.

The good news is that this practice may have its days numbered. In August, Senator Gaúcha Ana Amélia Lemos (PP-RS) presented a Bill to the Senate (PLS 284/2017) that regulates Article 146-A of the Constitution, allowing the creation of special taxation and inspection regimes. The initiative creates conditions for a much faster combat and effect of this type of company and has the support of ETCO.

A journalist with almost 40 years of professional experience, 31 of which covering Brasília's affairs for Rio Grande do Sul's RBS network, Ana Amélia entered politics in 2010. In her first race, she was elected senator with more than 3,4 million votes. Since then, she has stood out in Congress: she was chosen four times as one of the ten best senators in the Congress in Focus award, in 2013 she was appointed by the Inter-Union Department of Parliamentary Advisory (Diap) as the most influential woman parliamentarian in the National Congress and currently occupies second place in the Political Ranking, a survey that evaluates the legislative production of the 594 congressmen (senators and deputies).

On November 10, Senator Ana Amélia spoke about the purposes of PLS ​​284/2017 in an exclusive interview with ETCO Magazine.

Senator, your project seeks to regulate article 146-A of the Constitution. What is the main purpose of this constitutional article?

Senator Ana Amélia: Article 146-A of the Federal Constitution was formulated to prevent the use of tax as an instrument of competitive imbalance. The complementary bill (PL 284/2017) will allow not only the Union - which has always had the competence to deal with the issue - but also the States, the Federal District and the Municipalities to establish special differentiated taxation and inspection regimes, to neutralize the effects of taxes on competition.

In recent years, several business segments have been suffering unfair competition from companies that resort to illicit advantages, such as persistent tax defaults, to gain market share. Is the objective of the project to combat them?

Senator Ana Amélia: The bill establishes special taxation criteria, with the objective of preventing competition imbalances, without prejudice to the Union's competence, by law, to establish rules with the same objective. The intention is to avoid fraud, tax evasion, or even the use of persistent bad debt as a means for unscrupulous companies to increase their revenue and profit, gaining the market unfairly and harming competition. The project, therefore, has a broad spectrum, enabling the prevention of competitive imbalances regardless of how the tax is used to harm the Treasury and competition, including recurrent tax defaults.

quotes ana amelia

How do you see the losses that the regular tax debtors cause to society?

Senator Ana Amélia: The Movimento Combustível Legal website informed, based on a study by the Getúlio Vargas Foundation, that tax evasion in the fuel sector today is R $ 4,8 billion. It is money that could be raised and invested in investments in health, education, security and infrastructure. Whoever commits this crime takes advantage of loopholes in the legislation that allow the habitual debtor to continue exercising the activity even if he has debts with the State. The persistent debtor obtains disproportionate advantages in relation to that competitor who works legally, since he has a much greater margin to work. Tax evasion impacts directly and negatively on citizens' lives. The money that would be paid in tax related to the sale of fuels could be reverted to services aimed at the population, since more than half of the amount charged to the driver, at the pump, is a tax. Tax evasion creates an environment of unfair competition, harming legally working dealers and distributors. Another crime that needs to be fought and that harms the consumer is adulteration in the fuel, as it pollutes the environment, and fraud at the pump weighs on consumers' pockets.

How can the creation of special taxation regimes help to combat these unfair practices?

Senator Ana Amélia: The special regimes consist of differentiated ways of complying with tax obligations in order to make it possible to collect the taxes legally provided for. When traditional means of collection do not work, due to practices adopted by debtors with a view to circumventing them, there is a need to provide the Tax Administrations with adequate tools to combat them efficiently. That is the objective of PL 284/2017.quotes ana amelia 2

 

Has the Supreme Court maintained the same jurisprudence?

Senator Ana Amélia: The Federal Supreme Court has precedents (70, 323 and 547) that prevent the adoption of indirect coercive means to compel the taxpayer to collect taxes, such as, for example, the imposition of special serious regimes that prevent the regular exercise of economic activity. However, in RE 550.769 and in ADI 173, the Supreme Court noted that the guidance contained in such overviews does not apply when the taxpayer uses the default of the tax as a means to explore his activity and gain market, because, in this case, the exercise of economic activity becomes illegal and, as such, does not deserve judicial protection. In this scenario, the principle of free competition must be respected.

Does the Supreme Court's new understanding seek to protect the market balance?

Senator Ana Amélia: Yes, in a weighting of values, the Supreme Federal Court understands that free competition should prevail over free initiative, when the abusive exercise of economic activity is verified, with systematic and unjustified default of taxes. In this way, the protection of the market is sought, considered national heritage by the Constitution (art. 219).TUNING WITH THE STF

Today, because of the legal confusion, the collection processes of persistent debtors last more than ten years - and in that period the company causes great competitive damage. If your project is approved, will the solution be faster?

Senator Ana Amélia: This is also one of the purposes. The definition of clear taxation and inspection rules can speed up solutions and this will be beneficial not only to prevent unfair competition, but to prevent other irregularities that harm consumers and the environment. The project will separate the eventual debtor, who sometimes faces a problem and does not pay the tax for a specific period, but then makes an agreement and settles the debt, from that debtor who never pays the tax. Thus, the judiciary will be able to identify more accurately to make its decision. In addition, the Tax Administration may, in extreme situations, suspend or cancel the debtor's registration in the taxpayer register, which will allow the problem to be solved at its birthplace, avoiding the prolongation of its harmful effects on the market and society as a whole.

Could you summarize the main points of the project?

Senator Ana Amélia: The project foresees that the Union, states and municipalities can establish criteria for the fulfillment of tax obligations, such as, for example, special control over tax collection, maintenance of uninterrupted inspection in the establishment of a taxable person, anticipation or postponement of the taxable event and concentration of tax liability. incidence of the tax at a certain stage of the economic cycle, among other measures. It also provides for the alteration of the taxable person's situation in the taxpayer register to the suspended or canceled modalities. If the infractions persist, or if there is evidence that the company was constituted for the practice of structured tax fraud and for the production or commercialization of a stolen product or in non-compliance with the standards established by current legislation, this will be the treatment. The intention is to guarantee transparency and due process, without prejudice to the consumer and the owners of the establishments that work in compliance with the rules and ethical principles of the activity. The initiative also targets highly taxed sectors, such as beverages and cigarettes.

What are the types of punishment foreseen in the project?

Senator Ana Amélia: The bill determines that the administrative authority can change the status of the taxpayer in the taxpayer register to the suspended or canceled modalities. The suspension takes place when the infractions that motivated the application of a special regime persist, or the company does not have authorization from the regulatory agent or the competent supervisory body. The cancellation would be justified by reasons such as evidence that the company was constituted for the practice of structured tax fraud and for the production, commercialization or storage of stolen, stolen, falsified, adulterated goods or in non-compliance with the standards established by the regulatory agent or agency competent inspector.

Does the project preserve taxpayers' rights of defense?

Senator Ana Amélia: Yes, it provides for the prior summons of the taxpayer to exercise the right of defense, within a period of not less than fifteen days, and ensures the lodging of an appeal, without suspensive effect, which must be heard in up to ninety days, under penalty of immediate cancellation. differentiated regime, in addition to the individual application of the administrative authority, for up to twelve months, extension allowed by reasoned decision.

 

The project seeks to serve a noble and important cause, which is the fight against unfair competition. But can't it be used by states, municipalities or the Union in a distorted way just to increase revenue? Does the project make the limits clear to prevent this from happening?

Senator Ana Amélia: It cannot be used in a distorted way to increase tax collection because the special taxation criteria, foreseen in the project, are not apt to generate an increase in taxes. They only make it possible to collect the taxes already provided. In addition, its application must be preceded by a motivation that demonstrates the need, adequacy and calibration of the measures taken to protect free competition.

 

Can the differentiated regime be used in any sector and for any tax or does the project limit its application?

Senator Ana Amélia: The bill provides that the law is valid for any sector of economic activity in which there is a need to use differentiated tax instruments to ensure the smooth functioning of the market, with an emphasis on those in which tax is a relevant component in the composition of product prices or services and in which the structure of the production or marketing chain undermines the efficiency of controlling different forms of tax evasion. Only taxes levied on income, profit, financial transactions or equity are out of the reach of the project, given the characteristics of these taxes, which make them less likely to influence competition.

 

Senator Ricardo Ferraço had been chosen to be the project's rapporteur, but he excused himself at the end of October. How is the project now? What will be the next steps and what is your forecast regarding when it can be voted on?

Senator Ana Amélia: Senator Ricardo Ferraço's name is still listed as a rapporteur on the Senate portal. However, I imagine that, due to the 120-day leave, a new rapporteur may be appointed in the Economic Affairs Committee. From there, we will wait for the presentation and vote of the text in the committee. After that, the bill will still need to pass the Senate Plenary. Then he goes to the Chamber of Deputies. Being approved without modifications, it proceeds to presidential sanction. The commissions you will have to pass through the Chamber will be defined only after the project arrives at the House. There is no way to predict the approximate or exact time for processing, but I hope it can become law by the end of 2018.

 

 

 

The new edition of the ETCO Magazine is now available

ETCO MAGAZINE | December 2017 nº 21 - Year 14
You can read the ETCO Magazine here in the format FLIP, download the digital edition in PDF or read the articles individually on the website.
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It proposes tough law against persistent tax debtor

Senator Ana Amélia talks about a project that authorizes special taxation against those who use defaults to practice unfair competition. Read exclusive interview that she gave to the ETCO Magazine

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The economic logic of smuggling

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