Economic Value and ETCO Seminar


The newspaper Valor Econômico and the ETCO-Brazilian Institute of Ethics in Competition held on November 16, in São Paulo, the seminar O Devedor Contumaz and Ética Concorrencial. The event will discuss how to identify and fight businessmen who do not pay taxes to sell their products at a lower price than the competition and profit by taking advantage of the slow pace of justice.

Among the invited names are the Federal Revenue Secretary, Jorge Rachid, the Finance Secretary of São Paulo, Renato Villela, and the former President of the Supreme Court, Nelson Jobim. The event will also feature lectures by Evandro Guimarães, ETCO president, Helvio Rebeschini, director of the National Syndicate of Fuel Distribution Companies (Sindicom), lawyers Hugo Funaro and Luciano de Souza Godoy, specialists in the subject, by Fernando Marcelo Mendes, president from the Association of Federal Judges of São Paulo and Mato Grosso do Sul, and Cristiano Xavier Bayne, assistant attorney general for administrative matters at the Attorney General of Rio Grande do Sul.

Registration is free and can be done at event website.


STF will define whether cigarette factories can be closed due to default with the Revenue

After exactly five years, the Supreme Court may resume this Wednesday (21/10) a trial that opposes cigarette manufacturers and puts on the spot a law issued by the military dictatorship that authorizes the production and sale of tobacco only by industries up to date with the IRS.

In addition to involving few companies and being a highly regulated sector, the discussion is billionaire. According to the IRS, 12 companies were closed due to default in recent years. Together, they owe R $ 14,3 billion.

The peculiarity of the cigarette sector, however, means that the discussion does not place only defaulting taxpayers and the Federal Government in poles, but also cigarette manufacturers against their competitors. With a tax burden of 65% of the price of a pack of cigarettes, the non-payment of taxes inevitably generates effects on the final value of the product.

“Distortions in the tax burden resulting from the repeated failure to pay taxes end up causing an undue advantage to tax evaders, creating an imbalance that harms other companies,” says Evandro Guimarães, president of the Brazilian Institute of Competitive Ethics (ETCO), which acts as amicus curiae, at the trial.

Factories forced to close their doors raise free initiative, guaranteed by the Constitution, and classify as state sanctions acts that prohibit or create obstacles to economic activities as a way to constrain the taxpayer to pay taxes.


Based on the vote seen by Minister Cármen Lúcia, the ministers will strike the hammer on the constitutionality of item II of article 2 of Decree-Law 1.593, 1977. The standard authorizes the Revenue to cancel the manufacturer's special registration in case of default. taxes or non-compliance with accessory obligations, such as filing declarations. In practice, the absence of special registration prevents factories from functioning.

The Federal Government defends the position adopted by retired Minister Joaquim Barbosa, rapporteur of the Direct Action of Unconstitutionality (ADI) 3952. At the beginning of the trial, on October 21, 2010, Barbosa said that the measure would not only be interpreted as a political sanction to force the taxpayer to pay taxes if three parameters are obeyed: the relevance of the debt amount and the due legal process so that the company can appeal the punishment and also the collection of taxes.

In the face of countless precedents and supreme summaries 70, 323 and 547 that prevent the Tax Authorities from restricting business activity as a way of collecting taxes, the Union was left with no choice but to defend the application of the rule following the established requirements. In 2001, the government amended the decree of 77 through Provisional Measure 2152-35 to provide that manufacturers are notified of their fiscal situation and can appeal the cancellation of the special registration.

Prosecutors have tried to demonstrate to ministers that the amounts owed to the state are substantial. In addition, they have differentiated cases of delays in the collection of situations of repeated default.

“It is not just any situation that leads to closure. But this measure must be adopted when the company systematically does not pay taxes and uses this to have undue advantages in relation to the competition ”, affirms a public lawyer, adding that the weighting of free initiative with other principles, such as public health, authorizes the restriction activity. "There are free and tolerated economic activities, such as the manufacture and sale of cigarettes."

According to the president of ETCO, more than 10 years of experience in the cigarette sector has shown that companies that accumulate debts systematically do not intend to settle their debts.

“In addition, they make inspection difficult by refusing to show your tax books or preventing access to the establishment, fostering corruption, obtaining benefits from passing on the prices of your products and thus preventing the State from recovering taxes. These are those companies that we call Debtors Contumazes ”, says Evandro Guimarães.


In 2013, the Supreme Court upheld the cancellation of the special registration when judging the case of the country's most delinquent cigarette manufacturer (RE 550.796 / RJ). According to the IRS, American Virginia Indústria Comércio Tobacco Import and Export currently owes more than R $ 4 billion to public coffers, and is the ninth largest debtor to the IRS.

On the occasion, the majority of ministers followed the vote of the rapporteur, Minister Joaquim Barbosa, who reinforced his position on the constitutionality of the revocation of the special register, provided that the three requirements are observed.

"In my opinion, the understanding that political sanctions are unconstitutional does not include repeated disrespect for tax legislation," said Minister Ricardo Lewandowski.

Ministers Gilmar Mendes, Marco Aurélio and Celso de Mello were defeated. They understood that closing the company would be a kind of political sanction.

"This is a disproportionate measure and in direct conflict with the constitutional principles of free enterprise and due process," said Minister Gilmar Mendes, in the vote, adding that the effects of tax evasion on competition would not justify the measure.

The Supreme Court has won two new members since then: ministers Roberto Barroso and Edson Fachin, who will not vote in the judgment of ADI 3952 for having replaced the rapporteur, minister Joaquim Barbosa.

In view of the setting of parameters adopted by the Supreme Court, experts claim that the Judiciary will continue to analyze specific situations if the Court declares the cancellation of the special constitutional registration.

War of injunctions

Currently, 15 manufacturers are authorized to operate. But two are open only by court order. This is the case of Cia Sulamericana de Tabacos and Congo Indústria e Comércio de Cigaracos, Import and Export.

The Federal Government challenges the injunctions in the Supreme Federal Court (STF) that authorize the maintenance of the activities of the two companies.

The case of Sulamericana, for example, has already come and gone. In the Supreme Court, the discussion takes place in secrecy of justice (STA 752). The fight, currently, is in relation to the percentages of the debt that are due and with the suspended obligation, due to installments or questioning of the collection in the administrative sphere and in the Judiciary.

In August, the President of the Court, Minister Ricardo Lewandowski, reconsidered the decision made by him three months before the expiry of an injunction granted to the company by the 5th Federal Court of the Federal District and maintained by the TRF-1.

In the first decision, Lewandowski considered that the continuation of the company without registration would bring a risk of damage to public health and the economy. In the second, he reversed the order to keep the company open. The minister accepted the company's arguments that only 15,45% of the company's total debt would be fully payable. The percentage corresponds to R $ 167,2 million. Another 84,54% would have the liability suspended, that is, the company would be discussing the collection or would have split this liability.

Lewandowski distinguished the cases of Sulamericana and American Virginia, which, according to him, had more due debts than with the suspended requirement. It also applied to the case of Sulamericana the parameters set in the leading case, especially due process due to discuss tax debts. For Lewandowski, the closure would be disproportionate since the company questions a large part of the debts.

"In operation, the company will have a better chance of paying off its debts and fully discussing the legality of the constitution of tax credits," he said.


The National Treasury appealed the decision, pointing out a material error. According to the Treasury, Sulamericana accumulates a debt of R $ 810,5 million. Of this amount, R $ 347,8 million or 47% of the total would be due - and not 15,45% as pointed out by the company.

Sulamericana's lawyer, Vera Carla Nelson Cruz Silveira, says that almost all of the manufacturer's debt was in installments.

“With the ban, it was not feasible to pay the installments and the debt increased,” he says, distinguishing the cases of Sulamericana and American Virginia.

Despite the favorable decision at the Supreme Court, Sulamericana, which is headquartered in Duque de Caxias (RJ), has not resumed operations. "I do not know the reason, Anvisa has demanded absurd things ... But we are taking measures to make the decision effective in the future," he said.

The Federal Government also tries to overturn in the STF the early protection granted by the TRF-1 to Congo Indústria e Comércio de Cigarros (STA 759). In the opinion sent to President Ricardo Lewandowski, the Federal Public Ministry states that there is a risk of injury to public and economic orders with the continuity of the company's activities.

The attorney general's office defends the right to cancel the special registration based on Lewandowski's first decision in the case of Sulamericana and the Extraordinary Appeal 550.769, which, according to the MPF, consolidated the constitutionality of Decree-Law 1.593 / 77.

“In this case, it is demonstrated that the special registration was rejected precisely because of the substantial, repeated and unjustified non-compliance with tax obligations by the interested company and by its involvement and that of its partners in the practice of several crimes, among them, tax evasion, money laundering, conspiracy, ideological falsehood and debt avoidance ”, states the attorney general of the Republic, Rodrigo Janot, in his opinion.

O JOT tried to contact the company's lawyer, but was unsuccessful.


Source: Portal Jota (21/10)

To read the story straight from the source, click here.

Contumaz Debtor and Competitive Ethics

Contumaz Debtor and Competitive Ethics

This month, Valor Econômico will hold the seminar The Debtor Contumaz and the Competition Ethics that aims to bring the discussion about the practice of the debtor contumaz in the country, the impacts caused by this figure in the state governments and in the country and what can be done to increase legal certainty and ensure ethical competition across the economy.

Date: November 16, 2015
Time: 8h to 13h30
Location: Hotel Intercontinental
Alameda Santos, 1123 - São Paulo, SP.

One of the projects in which ETCO works is the combating the persistent tax debtor, a type of company that practices unfair competition through the intentional non-payment of taxes. Check out.

Valor Econômico holds seminar on recurrent tax debtor

O jornal Valor Econômico on the 28th of October, in São Paulo, the seminar O Debtor Contumaz and Livre Concorrência. The event is sponsored by ETCO-Brazilian Institute of Ethics in Competition and will discuss topics such as typification of permanent debtors, differentiated inspection regimes, market impacts and limits on free competition.

The seminar is aimed at presidents, CEOs, lawyers, corporate legal department executives, public farm attorneys, federal judges, judiciary officials and members of the judiciary and legislative branch.

The event will take place at the Intercontinental hotel, from 8:30 am to 13:XNUMX pm.

The persistent tax debtor causes serious damage to the competitive environment, as ETCO has shown in this newsletter.

Information about debtor persistent

The persistent tax debtor - Find out why it is harmful to the country.
Segments such as fuel and beverage distribution face unfair competition from companies that do not deliberately collect their taxes. These are the so-called hard debtors: they recognize the debt, but do not pay taxes, counting on the slowness of Justice to remain in the market for years.

Stubborn debtor - Understand why we must fight it.
ETCO-Brazilian Institute of Ethics in Competition supports initiatives to end this practice and has just published an informative about the subject.

The publication is available on the website or at ETCO headquarters. More information by phone (11) 3078-1716 or email to


Understand what the default debtor is

ETCO develops material with the objective of clarifying in a clear and simplified way, what is the Contumaz Debtor, the damage that this type of debtor causes to the country and how we must combat it.

Stubborn tax debtor:
Find out why this type of debtor is so harmful to the country and how it is possible to fight it

ETCO defends that the Public Power can use legal tools to combat the persistent tax debtor, which causes enormous damage to public coffers, free initiative, fair competition and the population as a whole. For this, it is essential that there is a union of efforts by the Executive, the Legislative, the Judiciary and the most diverse groups of civil society interested in the theme.


The creation of special taxation regimes for incumbent tax debtors and for critical sectors can reduce the losses that premeditated and systematic tax evasion causes to public coffers and the competitive environment. Some members of the Federation, however, are reluctant to create laws in this regard for fear that they will be overturned in court.

To help them, ETCO commissioned the tax expert Hamilton Dias de Souza, a member of its advisory board and master in Tax Law from the Faculty of Law of the University of São Paulo (USP), to study the arguments used in the processes and decisions already made taken by the Federal Supreme Court for this type of case.

The objective is to contribute so that States and the Union, when interested in implementing a differentiated tax collection regime, can create their bills with greater legal certainty.

ETCO also promotes awareness of the authorities on the subject, participating in debates and thematic events.

Magazine: How to Combat the Accurate Tax Debtor


Congress of judges discusses combating debtor

Savings, accounts payable, overheads.

Help the magistrates who judge cases of tax evasion to understand the problem of the persistent debtor. This was the objective of a lecture presented at the 2nd Taxation and Company Congress of Ajufesp - Association of Federal Judges of São Paulo and Mato Grosso do Sul. In an auditorium full of judges and judges, and with simultaneous transmission to other units of Justice Federal, law professor Luciano de Godoy, of the Getúlio Vargas Foundation, explained how the heavy tax evaders act.

According to him, one of the sectors most affected is fuel distribution, in which taxes, especially the ICMS, represent 30% to 40% of the product's price. Godoy acts as a lawyer for the Sindicom-National Union of Fuel and Lubricant Distribution Companies.

"The average debtor does not collect taxes and even sells fuel below cost," said Godoy. In doing so, it gains market quickly and accumulates profits while delaying administrative and judicial tax collection processes to the maximum. When, years later, he is ultimately convicted, the debts have already become much higher than the company's equity, which ends up ending its activities. Meanwhile, competitors who act within the law are harmed. “In the past, the big problem in the sector was adulterated fuels,” said the FGV professor. "Today, they are the permanent debtors."

Godoy took stock of the legal situation related to this type of tax evasion. He recalled that some states, such as Rio Grande do Sul, created special inspection regimes, which require the advance payment of taxes and include other measures to curb the practice. But these laws are being challenged in court on the grounds that they would undermine free enterprise.

After the presentation of the problem, federal judge Fernando Marcelo Mendes, president of Ajufesp, suggested that the matter be taken to a committee that studies changes in the collection of active debt by the States and the Union.

Present at the event, the executive director of Sindicom, Jorge Luiz Oliveira, spoke about the importance of the lecture. “Taking this type of knowledge helps the magistrates to understand the harm that the frequent debtor causes to the fuel sector and to society”, he commented.

Sindicom and ETCO-Instituto Brasileiro de Ética Concorrencial support initiatives to combat persistent debtors.



Law reduces the number of regular ICMS debtors in Rio Grande do Sul by 26%

Since 2011, the government of Rio Grande do Sul has had a valuable instrument to combat ICMS tax evasion. It is a differentiated collection regime for the so-called debtor, a type of taxpayer who evades the tax on purpose to have an unlawful advantage in competition with other companies. This regime includes several measures to hinder tax evasion and has been obtaining important results. In four years, the number of companies in this situation has dropped 26%. In addition, Rio Grande do Sul was able to recover R $ 17 million owed by these taxpayers. Such results have drawn the attention of other states and inspired a draft state law against repeat debtors that has the support of ETCO-Brazilian Institute of Ethics in Competition.

The figure of the persistent debtor is present in several segments, but it is more common in sectors such as the distribution of fuels, drinks and medicines. In many cases, the payment of taxes is delayed for so long that, when the government is able to collect the debt, the value of the debt exceeds the assets of the company, making payment unfeasible. Many of these deals are closed before the government even makes a final decision on the matter.


Bad faith to increase profit

This type of debtor is different from the entrepreneur who, due to a momentary problem in his cash flow or any other eventuality, fails to pay the tax, but has an interest in regularizing his situation. “The regular debtor acts in bad faith, failing to pay taxes to increase his profit margins and to have undue advantages over the competition”, says Mario Luis Wunderlich, undersecretary of Revenue of Rio Grande do Sul. To separate these two types of debtors , the gaúcha legislation created a criterion to determine who can be classified as contumazado. According to the text, this category includes the taxpayer who fails to collect the ICMS for at least 8 months of the last year.

In addition, the legislation provides for the issuance of notices so that the taxpayer has the opportunity to regularize his situation before any form of penalty. Only after that can the company be included in the differentiated regime for regular debtors. Currently, 55 companies are in this category in Rio Grande do Sul - and about a thousand are at risk of joining the group.

Whoever enters this category should start to collect the ICMS at the time of issuing the note, instead of doing it monthly on the total of notes issued in that period. Another way found by the gaucho government to pressure taxpayers not to resort to this type of practice is to count on the support of the clients of these companies. For this, the redemption of ICMS credits theoretically paid by companies classified as permanent debtors is only possible if the tax collection guide is presented.

"With this, many companies end up doing business with whoever is listed," says Ricardo Pereira, who, at the time of the implementation of the law, acted as undersecretary of the State Revenue. In addition to serving as a form of pressure, this device allows the government to deal with another problem: by providing ICMS credits generated by a company that does not pay its taxes, the state tax system has a double loss. "In addition to not receiving, we had to pass this amount on, making the impact of tax evasion much greater than what is apparent," says Wunderlich.



Despite its benefits, the law in force in Rio Grande do Sul has been challenged. At first, the text was questioned by the State Court of Justice, which judged there was no reason to suspend its execution. Soon after, the Social Liberal Party sued the Federal Supreme Court (STF) alleging that the law is unconstitutional. According to groups that question the government's initiative, the project violates the right to free enterprise by instituting rules that make it difficult to carry out the commercial activities of companies that fall under the differentiated regime. "In fact, what hurts free enterprise are practices that are harmful to good competition," says Wunderlich. "This is what needs to be tackled." There is still no date for the judgment in the STF.

To reinforce the importance of legislation, groups with an interest in the topic, such as the National Union of Fuel and Lubricant Distribution Companies (Sindicom), have been supporting the gaucho government in the Supreme Court, through a legal instrument called amicus curiae, whereby an entity interested in the process requests the right to manifest itself in the case file, even if it is not one of the parties directly involved in the process. “Behind serious debtors there are real organizations that practice tax evasion as a source of illicit enrichment,” says Jorge Luiz Oliveira, executive director of Sindicom. "Against them, traditional inspection mechanisms are not enough: a differentiated regime is needed."

Throughout history, the STF has deemed some initiatives found by states to combat hard-hitting debtors to be unconstitutional. According to the understanding of the ministers, the appropriate way to get the taxpayer to pay his taxes would be tax enforcement. But they admit the imposition of differentiated obligations in exceptional cases.

ETCO also acts in the fight against the figure of the persistent debtor. The institute has started a series of initiatives in this direction that will be developed for at least the next two years. One of them was the support for the creation of a draft state law that details the exceptional situations to fit certain taxpayers in special regimes, prepared by the Dias de Souza Advogados Associados office based on a broad analysis of the jurisprudence. The text also describes the appropriate measures and limitations for their application. The objective is that the document serves as a reference for other states to create their own laws against heavy debtors. “It would be beneficial to adopt this law by the interested tax authorities, for the benefit of the market and the population in general,” says Hugo Funaro, a lawyer at Dias de Souza.