ETCO develops material with the objective of clarifying in a clear and simplified way, what is the Debtor Contumaz, the losses that this type of debtor causes to the country and how we must combat it.
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.
Practices of economic agents of a fiscal nature have been observed for a long time that harm the market. Such practices include the intentional and systematic default of taxes, the abusive use of judicial measures (concession and injunctions in reckless actions, without enough assets to satisfy the debt in the future) and tax evasion (false declarations, under-invoicing, smuggling, embezzlement) etc.). Often, such practices are associated with organized crime, involving adulteration and counterfeiting (piracy) of products.
These practices affect innumerable sectors of the economy, especially those where large volumes of products are traded, with reduced profit margins, considering that the artificial reduction of prices (due to the suppression of taxes) makes it possible to grab a market share that provides quick gains. and expressive, as occurs, quite frequently, in the cigarette, fuel and beverage sectors [1].
The performance of entities such as (Etco) has made it possible to publicize these practices and raise public awareness of their harmful effects, not only for the treasury but also for competition and the economy as a whole. There are studies that estimate the informal movement of goods and services at R $ 983 billion, just in 2016 [2]. This is the dimension of the problem, which affects the allocation of resources, creating an underground economy, which contributes to the country's current social, political and economic deterioration.
In view of this, public entities, especially the states, have sought to create special rules for the control of business practices of a tax nature that affect the market [3].
2. Political sanctions are not to be confused with sanctions for unlawful acts
However, there is strong resistance to the application of special inspection and taxation regimes, as well as to the adoption of more drastic measures against debtors. Normally, it is alleged that the Supreme Federal Court has peaceful jurisprudence prohibiting the use of any means of inspection and collection of taxes that prevent or hinder the exercise of business activities, in order to compel the taxpayer to comply with its tax obligations. The understanding, reflected in overviews 70, 323 and 547 [4], is based on the principles of freedom of initiative, proportionality and due process [5] [6] [7].
In fact, what the jurisprudence of the Supreme Federal Court prohibits are the so-called political sanctions, thus understood “the unreasonable or disproportionate restrictions to the exercise of lawful economic or professional activity, used as a form of induction or coercion to the payment of taxes”, reason why “the guidance signed by the Supreme Federal Court does not excuse deliberate and reckless disregard for tax legislation. There is no need to talk about political sanctions if the restrictions on the practice of economic activity aim to combat corporate structures that have systematic and conscious tax defaults as their greatest competitive advantage ”[8] [9].
As it turns out, the Federal Supreme Court distinguishes between debtors who exercise their economic activities in a lawful manner and, therefore, have the full protection of constitutional principles mirrored in overviews 70, 323 and 547; and debtors who act illegally in the market, through intentional and systematic non-payment of taxes, and who do not enjoy constitutional protection against the adoption of different instruments for the control and collection of tax credits, as they practice a true “macro-delinquency” repeated tax ”, in the words of Minister Ricardo Lewandowski.
Indeed, the Law is conceived predominantly as a coercive order [10], in order to induce the conduct desired by society, "providing coercive acts as sanctions in the case of the opposite conduct" [11]. Thus, if the act is unlawful, the sanctions established by the legislator will be a mere legal consequence of the realization, in terms of facts, of the hypothesis abstractly forbidden in the norm. Therefore, political sanction cannot be considered. In these situations, the sanctions will be the response of the Law to the anti-legal act practiced by the taxpayer.
The lawfulness of the conduct is, therefore, the criterion that allows the selection of taxpayers who may or may not be subject to restrictions in the development of their activities, due to the eventual default of tax obligations. The degree of the restriction, whether total or partial, will depend on the establishment of a regular process for the examination of each situation and the appropriate measure to regulate it, in accordance with the principles of due process and proportionality.
Thus, it is essential to separate the different types of debtor in order to verify whether the restrictions imposed on them due to the default of tax obligations are characterized or not as political sanctions, or whether they are reasonable, depending on the nature and effects of the conduct.
3. Types of debtor: eventual, repeated and repeated
In this sense, it is possible to identify three types of debtor: the eventual one, who, for whatever reason, fails to collect taxes for indefinite periods; the repeated, which often fails to collect taxes, as a way to finance its activities (it stops paying taxes instead of resorting to bank loans for working capital, for example), or even due to structural market conditions ( economic crisis), or by pure speculation stimulated by successive installment programs (Refis, Pert, etc.); and the contumaz, who intentionally and systematically fails to collect taxes, in order to move about and distort competition.
The first two types of debtor (eventual and repeated) act lawfully in the market and must undergo the normal debt collection procedure (inscription in active debt, tax enforcement, listing of assets, fiscal precautionary measure, CDA protest, etc.), in principle, they cannot suffer any restriction on the freedom of initiative aimed at forcing them to fulfill their obligations. It is possible, however, that the repeated lack of payment of the tax ends up inflicting losses on third parties, for example, if prices are artificially reduced to the point of hindering the performance of competitors. In this case, the repeated debtor may be subject to special tax inspection and collection regimes, to the strict extent necessary for the normalization of the market [12], in the form of Article 146-A of the CF [13].
The situation of the third type of debtor (debtor) is absolutely different. This acts in the field of the illicit. These are criminals, not businessmen, who abuse the legal entity as a front to never pay taxes and thereby gain competitive advantage, among others. To do so, they violate the law on a daily basis, practicing numerous illicit acts, usually through the use of oranges, address registration and false partners, invariably possessing insufficient assets to satisfy tax, labor and other obligations. Therefore, they must be prevented from acting. The right to them does not help, except for the procedural guarantees provided for in the constitution related to due legal process, broad defense and adversarial proceedings. Once the contumacy of the conduct is determined, it must be repressed, in a rigorous and exemplary manner, through legal sanctions that prevent the continuation of the agent's activities (interdiction of the establishment, revocation of registration in the taxpayer register), in order to preserve the treasury and the market, which has free competition as one of its fundamental principles, as an inseparable link of free enterprise [14]. After all, what the Constitution guarantees is the freedom of initiative for the development of lawful activity, never the practice of activities in an illegal way [15].
4. Conclusion
In conclusion, it is necessary to distinguish tax debtors in order to specify the legal treatment that should apply to them:
(1) to eventual debtors, scoresheets 70, 323 and 547 are fully applied, and it is not possible to impose political sanctions as a means of collecting taxes;
(2) the repeated statements of the Supreme Court are also applied to the repeated debtors, however, their flexibility is possible, when management proves, having observed due legal process, that the tax default has affected the market, in order to guarantee tax neutrality. (article 146-A of the CF); and
(3) protection against summary statements does not apply to regular debtors, and the State must establish legal sanctions that prevent the unlawful performance of these agents in the market.
[1] Approximately R $ 4,8 billion are not collected annually in the fuel sector (FGV), with R $ 18 billion being registered in federal debt with respect to the tobacco sector (PGFN) and R $ 1,8 billion enrolled in active debt only in the state of São Paulo, with respect to the soft drink sector.
[2] https://www.etco.org.br/economia-subterranea
[3] The states of Rio Grande do Sul, Pernambuco and Bahia, among others, have specific legislation to curb these practices. There is a direct action of unconstitutionality before the Federal Supreme Court questioning this type of measure (ADI 4.854-RS).
[4] "Precedent 70. The prohibition of establishment as a coercive means for collecting taxes is inadmissible."
"Precedent 323. The seizure of goods as a coercive means for paying taxes is inadmissible."
"Precedent 547. It is not lawful for the authority to prohibit the taxpayer in debt from acquiring stamps, dispatching goods through customs and carrying out their professional activities."
[5] In RE 39.933 Segundo / AL, the STF declared the provision contained in the municipal tax code that allowed the seizure of goods for payment of taxes to be unconstitutional. It was understood that it is not up to the public entity to “do justice by hand if the law establishes the fiscal executive action, for the collection of the active debt of the Public Treasury in general” (Pleno - Min. 13/04).
[6] In RE 9.698 / GB, the STF considered the prohibition of commercial establishments to be unlawful in order to compel the taxpayer to pay taxes or fines. , the prohibition of its establishment, as a penalty intended to compel it to pay the debt. Now, the City Hall of the former Federal District - today of the State of Guanabara - has a regular and adequate means for the collection of the debt, which is the fiscal executive. What is not lawful, as it constitutes a procedure contrary to the law and the rule of law in which we live, is the drastic: - ban on the activities of the petitioner ”(Full - Min. Henrique D'Ávila - DJ: 05/11 / 1962).
[7] RE 413.782 / SC stated that the tax authorities' refusal to provide invoices due to the fact that the taxpayer has tax debts, requiring the use of separate invoices for each operation, “contradicts (…) the guarantee of the free exercise of work , office or profession - item XIII of article 5 of the Charter of the Republic - and of any economic activity - sole paragraph of article 170 of the Federal Constitution ”. In addition, it was reaffirmed that “the State cannot use indirect means of coercion, converting them into instruments for adjusting the tax relationship, for, in function of them - and through interdiction or severe restriction on the exercise of business activity, economic or professional - embarrass the taxpayer to comply with tax obligations that may be in arrears ”(Full - Rel. Min. Marco Aurélio - DJ: 03/06/2005).
[8] Full - RE 550.769 / RJ - Min. Report Joaquim Barbosa - DJe: 02/04/2014.
[9] This understanding was ratified by the STF when declaring the constitutionality of the Active Debt Certificate protest (ADI 5135 / DF, Rel. Min. Roberto Barroso, J. 3 and 9.11.2016).
[10] “In the general theory of contemporary law, the repressive conception of law is still dominant. Whether the force is considered a means to obtain maximum respect for the (primary) norms of the system, or whether it is considered as the content of the (secondary) norms, the dominant conception is certainly the one that considers the law as a coercive order, thus establishing , a necessary and indissoluble link between law and coercion. This translates into the exclusive importance given to negative sanctions: coercion is itself considered a negative sanction, or else, the extreme means to make effective (negative) sanctions, predisposed by the order even for the conservation of the normative patrimony ” (BOBBIO, Norberto. From structure to function: new studies of theory of law. 1. Ed. Barueri: Manole, 2007. Translation by Daniela Beccaria Versiani, p. 7).
[11] KELSEN, Hans, What is Justice? Justice, law and politics in the mirror of science; translation Luís Carlos Borges, - 3rd Ed. - Sâo Paulo: Martins Fontes, 2001, p. 286.
[12] “(…) the rule is the freedom to exercise economic activity, as a corollary of free enterprise, in which the State must not interfere in the voluntary manifestation of its citizens for that purpose. However, this does not mean that the State, in cases where the interest of the community is evident, cannot regulate economic activity, imposing requirements for its rational exercise, even acting with the power of administrative police to enforce and implement such measures, and such device to be interpreted systematically with the other constitutional precepts of economic law ”. (FIGUEIREDO, Leonardo Vizeu. Lessons in Economic Law. 4. ed. Rio de Janeiro: Forense, 2011. p.65-66)
“(…) Free enterprise is not synonymous with absolute economic freedom (…). What happens is that the principle of free enterprise, inserted in the caput of art. 170 of the Federal Constitution, is nothing more than a general clause whose content is filled in by the items of the same article. These principles clearly define freedom of initiative not as an anarchic, but as a social freedom, which can, consequently, be limited ”(SALOMÃO FILHO, Calixto. Regulation of Economic Activity (legal principles and foundations). São Paulo: Malheiros, 2001. pp. 93-94).
[13] “Art. 146-A. Complementary law may establish special taxation criteria, with the objective of preventing competition imbalances, without prejudice to the Union's competence, by law, to establish norms with the same objective. ”
[14] “Regular tax defaults are a type of default that is prolonged over time, often planned by the taxpayer, which ends up having harmful effects in terms of competition, not to be confused with that occasional and sporadic default, as a result of the company's financial difficulties. , which in no way affects free competition. (…) This kind of individual conduct goes beyond the limits of freedom of initiative and free competition, and does not deserve to be protected by the legal order, as it places the defaulting person in a privileged position in relation to its competitors in the market, since, not burdened by taxation, can offer its asset at a substantially lower cost or make unjustified profits ”. (LIMA, Ricardo Seibel de Freitas. Free competition and the duty of tax neutrality. 2005. 143 p. Dissertation (Master in Law) - Federal University of Rio Grande do Sul. Porto Alegre: 2005).
[15] “In these cases, in view of the abnormal conduct, the way of combating such action, which directly affects the right to competition and the market rules, cannot be based on simple judicial collection, since planning and abuse of taxpayer status. The measures that are required, in this case, are to stop the damage, and not to attempt to recover the damage. This is because the damage to lawful competition has already been consummated, and cannot be recovered in tax enforcement ”(MÖLLER, Max. Political sanction and special inspection regime. Thesis presented at the XXXIX National Congress of State Attorneys. Http: // anape. org.br/site/wp-content/uploads/2014/01/TESE-2-AUTOR-MAX-MOLLER.pdf)
Hamilton Dias de Souza is a founding partner of Dias de Souza Advogados Associados, a master and specialist in Tax Law at the Faculty of Law of the University of São Paulo (USP) and a member of the ETCO Advisory Board.
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)
Senator Ana Amélia talks about her Bill to fight companies that use tax defaults to win the market
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.
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.
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).
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 legal fuel movement seminar was held last Wednesday, 8/11, with the participation of ETCO, Sindicom, Government and Judiciary authorities, including the Regional Superintendent of the Federal Police in SP, Disney Rosseti .
The Legal Fuel Movement aims to combat tax evaders known as hard-hitting debtors, who do not pay their taxes and use tax evasion as a business strategy, harming honest competition.
Edson Vismona, president of ETCO, participated in the panel dedicated to “Operation Rosa dos Ventos”, launched by the PF in the fight against fraud in the fuel sector. In August, Operation Rosa dos Ventos of the Federal Police, Revenue and Federal Public Ministry arrested at least 20 people for tax evasion in the area of fuels in the region of Campinas. The losses reached R $ 3 billion. The PF delegate, Paulo Víbrio, participated in the event and reinforced the importance of the work. Also participating in the panel were the Federal Police Delegates, Victor Hugo Rodrigues Alves Ferreira and Estela Beraquet Costa and the Federal Prosecutor Ricardo Perin Nardi.
The State Secretariat for Justice and Citizenship coordinates operations against fuel and pump fraud, a situation that occurs in all municipalities in the state, as highlighted by the secretary, Márcio Elias Rosa. In the Campinas region, from January to September, 17 gas stations were closed due to irregularities, during operations.
The fuel sector suffers greatly from tax evasion, caused by a minority of entrepreneurs malicious. Everyone loses: the market, society and especially you!
LIKE THE DAMNERS DO IT?
They do not pay their taxes and use tax evasion as a business strategy, harming honest competition. They are known as stubborn debtors.
I DONT CARE?
There are almost R $ 5 billion that could be invested per year in public benefits.
With this amount it would be possible to pay for:
One year salary for 36 new doctors;
One year salary for 100 thousand new police officers;
The duplication of about 1.100 km of roads;
The teaching of almost 2 million children.
MAKE A DIFFERENCE AND SUPPORT THIS CAUSE
Leave your name and I know your email, expressing your support for the Senate Bill 284/2017, authored by Senator Ana Amélia, which differentiates the debtor from the eventual debtor of taxes (who experiences temporary difficulties and has intention to pay).
Enough of impunity! We need your support to stop this!
According to FGV, tax evasion in the fuel sector reaches R $ 4,8 billion per year.
Fuels, cigarettes and beverages are products that have a high tax burden in Brazil, reaching 50% of the final price.
From a competitive point of view, if all producers, distributors, resellers respected the law and worked legally, the market would remain balanced. However, the high tax burden opens up possibilities for tax evasion, which harms the market as a whole, creating a competitive distortion.
In the fuel sector alone, the states stopped collecting, in 2016, about R $ 4,8 billion in taxes, according to a study by the Getúlio Vargas Foundation (FGV) in July 2017. This figure represents only part of the taxes that are not paid to public coffers, related to ICMS.
That businessman who does not pay due taxes has a much greater margin to work, highlights Edson Vismona, Executive President of ETCO - Brazilian Institute of Ethics in Competition. According to him, there are companies structured to not pay taxes, which “push non-payment” and obtain disproportionate advantages in relation to the competition.
Ronaldo Redenschi and Julio Janolio, partners of the firm Vinhas e Redenschi Advogados also call attention to the judicial issue. With a fragmented judiciary, in a highly taxed sector such as fuel, what we see are “injunctions and injunctions that have a devastating effect on competition”, they say.
“The company that operates with an injunction has advantages over the competition by not paying the same taxes. And with the recent increases in state ICMS and PIS / Cofins by the federal government, this has become an almost daily problem, ”says Janolio.
From the point of view of the formal market, there is a concern to have respected free competition, which, according to him, does not happen with those persistent debtors, informal companies and those that operate with injunctions.
For Paulo Furquim de Azevedo, Coordinator of the Business Studies Center at Insper, “the actor most affected in this 'game' is the small businessman who wants to formalize himself. He competes directly with the one who evades ”.
The small distributor that wants to play the game honestly and wants to grow in the market is going to have a huge difficulty. It cannot put the price too low, because the tax burden is high. If a price similar to that offered by large distributors is placed, the consumer thinks it is expensive and supplies in the known. "If you do not have a consolidated brand, it is difficult to enter the market", highlights Furquim.
In addition, in the fuel sector, there is the issue of adulteration. This is perhaps an even more serious problem.
“This is a market where the consumer is not very aware of the product he buys. He gives preference to the brand that conveys more confidence. He pays for trust, even if he has to pay more for the same product, ”says Furquim.
Francisco Neves, Supply Supervision Superintendent of the National Oil and Gas Agency (ANP) highlights the importance of the consumer having an active and attentive attitude to the consumption environment. For him, it is important to know better the product he will acquire, the commercial rules, how to activate the control organs.
“Price is not the only factor that should be taken into account by the consumer. He must pay attention to the origin of the product, seek authorization for operation, see if the pumps have an Inmetro seal, request the invoice. All of this is part of the commercial relationship and brings security to the consumer. ”
In addition to the constant inspection by the ANP, other important actions that have been taken in order to avoid tax evasion and maintain a more competitive market, such as state laws to remove state registrations from irregular companies, the bill in progress in Congress to combat the stubborn debtor etc.
Jurists, magistrates, prosecutors, state and federal deputies, as well as representatives of civil society, met this Thursday (14/9) to discuss the social security deficit in Brazil. The public hearing was held in the Paulo Kobayashi auditorium of the Legislative Assembly.
According to the Budgetary Guidelines Law (LDO) of 2018, the Union's active debt is R $ 1,8 trillion, with the Brazilian GDP being R $ 5,5 trillion. In administrative proceedings alone, there are R $ 980 billion, mainly due to persistent debtors.
The Brazilian judicial system has an accumulation of executions of tax proceedings. Data from the National Council of Justice (CNJ) this year show that 91% of enforcement proceedings are stalled in this type of action. In Federal Justice, 38% of all cases are of a tax nature. At the Court of Justice (SP), 12 million, out of the 20 million total shares, are taxable. "The prosecutors' offices need agility in these charges, so that they can, together with the judge, use measures such as conciliation, to prevent delays from persisting," said Heleno Torres, professor at USP's Department of Economic Law.
The member of the São Paulo Association of the Public Ministry, Paulo Penteado Teixeira, discussed tax refinancing (Refis), which, according to him, creates a vicious circle. “Refills are subject to rebates and installments, which makes defaulting an excellent deal. The bad entrepreneur does not pay taxes, because "in addition to not paying" he suffers amnesty from the debt and gets rid of the criminal problem ", he informed.
Banks and airlines and land transport companies, such as bus and security companies, are considered the main tax evaders and debtors of Social Security and also those that most dismiss employees in exchange for automation. “The Labor Court proposes an amendment related to automation, which promotes massive layoffs of employees, so that there is a specific taxation of higher contributions to those dismissed. The list of major debtors of Social Security coincides with that of major labor debtors, ”declared the secretary of the National Association of Labor Justice Magistrates, Judge Silvana Abramo.
Another fact addressed was that, according to the National Labor Secretariat, R $ 33 billion reais are no longer collected due to the lack of registration of employees. "In addition to huge damage to the Treasury and Social Security, it also causes damage to the employee, who finds it very difficult to retire," said the attorney general, Wellington Viturino de Oliveira.
For federal deputy Arnaldo Faria de Sá (PTB / SP), the situation is very difficult for the worker. “The lack of mobilization is giving the government a break, which, through amendments and positions, is approving what it wants. In October, the federal government will resume the Pension Reform and we have to carry out a major mobilization ”, he declared.
In addition to those mentioned, the deputy was present Leci Brandao (PCdoB), who requested the hearing, Congressman Teonílio Barba (PT), Senator Paulo Paim (PT / RS), responsible for the Social Security CPI, the president of the National Association of Prosecutors, Norma Angélica Reis Veloso Cavalcanti, the president of the Association of Federal Judges of Brazil, Roberto Carvalho Veloso, and the member of the Brazilian Institute of Ethics in Competition, Edson Vismona.
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