Tag: underground economy

Reducing the Informal Economy

ETCO encourages studies and supports campaigns to reduce the size of the shadow economy, which does not pay taxes, weakens labor relations and gets in the way of honest companies.

REFERENCES

  • The Informal Economy in Rio de Janeiro: problem or solution, by Rodrigo Lopes. Editora Mauad, 1996.
    The work is a detailed study on the informal economy in the city of Rio de Janeiro, addressing the theme with comparative tables and graphs, its social and economic causes, and presenting a suggestion for solving the problem of unemployment and improving working conditions. Informal.
  • Informal economy and law in Brazil, by Ney Prado. Editora LTR, 1991.
  • Employment in the Informal Economy of Latin America, by Renato Duarte. Editora Massangana, 1984.
  • Wealth and Misery at Work in Brazil, by Ricardo Antunes. Editora Boitempo, 2006.
    The result of collective research by various sectors of the Brazilian economy, from classical to banking, from the automobile industry to the informal economy, this book provides an overview of the current moment and the future of work and unionism in Brazil. Ricardo Antunes and a group of researchers and authors, such as István Mészáros, Luciano Vasapollo, Márcio Pochmann and Giovanni Alves, study the impacts of changes in legislation; the new international and regional division of labor and capital, such as the impact of Chinese products and the move of manufacturing units to the interior of the country; and recent technological changes, such as the adoption of toyotism's administrative methods.
  • Brazilian Economy, by Manoel Luzardo de Almeida. Editora Ortiz, 1992.
    The work deals with subjects such as the four cycles that make up the economic history of Brazil, economic and financial systems, evolution of the economic situation, export policy, presence of the State in the economy, taxation, import substitution process, demographic variable, labor market , government planning, inflation, macroeconomic policies, instituted informal economy and economy of Rio Grande do Sul.
  • Informal Economy, Appropriate Technology and Associations, by Diva Benevides Pinho. Editora Ipe Usp, 1986.
  • Informal Economy Understand the Brazilian Economy With Informality, by Otoniel Pacheco Filho. Editora Blend Consultoria, 1995.

Underground Economy Index confirms downward movement

The Underground Economy Index (IES), released at the end of May by ETCO together with the Brazilian Institute of Economics of the Getúlio Vargas Foundation (FGV / IBRE), reached the mark of 16,2%, a reduction of 0,6 point percentage over the previous year. This percentage resulted from the introduction of PNAD Continuous data in the calculation of the index and which were also applied to correct the 2012 index.

In absolute values, the estimate is that the underground economy - the production of goods and services not reported to the government, which is outside the national GDP - exceeds the R $ 782 billion mark in 2013.

“The use of Continuous PNAD confirms the fall of the underground economy in the country, which we have been pointing out since the beginning of the historical series of the IES, in 2003”, comments the researcher from FGV / IBRE, Fernando de Holanda Barbosa Filho. This is because, according to him, the fall is even more relevant when the data from more than 5 small municipalities of the Continuous PNAD is incorporated, compared to the 3,5 of the previous PNAD. “Historically, formality is stronger in large centers, and this result shows that it is also spreading to small municipalities, even though the economy is no longer as vigorous. It is what I usually call the country's institutional improvement ”, explains Barbosa Filho.

Driven by access to credit, both for employers and for employees, who are forced to formalize their activities in order to obtain financing, the drop in informality may also be rooted in tax breaks for some sectors of the economy.

“As well as the tax exemption, other factors, such as the expansion of the use of the Electronic Invoice, the de-bureaucracy of tax processes and the policies directed at small entrepreneurs (MEI, Simples Nacional), show the importance of public policies to contain informality” , says ETCO's executive president, Evandro Guimarães. "Measures like these certainly have a lot of value in balancing the economy, and should always be analyzed from the perspective of reflexes in the short, medium and long term."

What is certain is that informality brings direct losses to society, creates an environment of transgression, stimulates opportunistic economic behavior, with a drop in the quality of investment and a reduction in the growth potential of the Brazilian economy. In addition, it causes a reduction in government resources for social programs and investments in infrastructure.

Interview with Roberto Abdenur, president of the ETCO Institute

27/11/2012 - Interview with Roberto Abdenur, president of the ETCO Institute

[iframe width = ”600 ″ height =” 490 ″ src = ”http://www.youtube.com/embed/y_vMHd2Lnng?hl=en&fs=1&rel=0 ″ frameborder =” 0 ″ allowfullscreen]

Clipping Type: TV
Subject: Miscellaneous
Date: 27/11/2012 - 12:33
Broadcaster: Globo News
Program: Checking Account
Duration: 00:10:17

Details of companies that are part of the informal market

27/11/2012 - Details of companies that are part of the informal market

[iframe width = ”600 ″ height =” 490 ″ src = ”http://www.youtube.com/embed/f9nc3cKFSpw?hl=en&fs=1&rel=0 ″ frameborder =” 0 ″ allowfullscreen]

Clipping Type: TV
Subject: Miscellaneous
Date: 27/11/2012 - 08:12
Broadcaster: Rede Globo de Televisão
Program: Bom Dia Brasil
Duration: 00:05:17

Tax digitization helps to reduce informality

Source: DCI (São Paulo - SP) - 05/06/2012

According to Professor Roberto Dias Duarte, a specialist in the Public Digital Bookkeeping System (Sped), this fiscal digitalization helped to reduce the rate of the so-called underground economy, also known as the informal economy.

From 2007 to 2008, the indicator in relation to the Gross Domestic Product (GDP) decreased from 19,5% to 18,7%. "This is because in this period [among other factors] there was the implementation at Sped in Brazil", he evaluates. In the following years, 2009 and 2010, the rate - calculated by the Fundação Getulio Vargas (FGV) and the Brazilian Institute of Ethics in Competition (ETCO) - was 18,6% and 18,4%, respectively.

The explanation, according to the expert, is because Sped, by facilitating the inclusion of Brazilian entrepreneurs in the formal system (Simples Nacional or Micro Empreendedor Individual), made it possible to rationalize accessory obligations. In other words, greater understanding of what the government should pay in tax.

“In this digital tax ecosystem, which integrates companies and authorities, the existence of an underground economy is becoming more and more difficult and expensive every day”, he understands, adding that the fight against unfair competition is one of Sped's objectives and causes it to decrease informality in the country.

On the other hand, Duarte recalls that the rate of the underground economy in relation to Brazil's GDP, which represents more than R $ 660 billion, is “almost the size of an Argentina”, in addition to being well above the world average, which is 10%.

Difficulties

For Duarte, the difficulty in adapting to the tax and accounting digitalization system, especially for micro and small entrepreneurs, is a matter of management. "Many are not informed about this adequacy".

For Professor Edgar Madruga, “the biggest problem for Sped is cultural”. “The owner of a company has to know that it is his responsibility to adapt to the system in the best possible way. The risk is entirely his, ”he analyzes.

According to also a specialist in Sped, and a member of the Brazilian Association of Tax Law (Abat), Tânia Gurgel, there is a high cost for micro and small companies, ranging from R $ 200 thousand to R $ 300 thousand, involving from their own technology for each obligation within Sped, until training of the internal team. “And for large companies, it can reach a cost of R $ 30 million”, adds Jorge Campos, tax specialist at Aliz, and is also an administrator on the Sped Brasil blog.

The experts' comments were made yesterday during the 1st National Forum on the Digital Tax Era and the Electronic Crossing of Tax Information, carried out by Aba.

Research

Research by JAPS Sped, coordinated by consultants José Adriano Pinto and Roberto Dias Duarte, shows that there are several problems that companies face in relation to Digital Tax Bookkeeping (EFD).

The survey, carried out between March 15 and 18, 2012, was attended by 470 professionals responsible for the Bookkeeping of more than five thousand corporations.

According to the study, although 90,2% had transmitted the files on the initial deadline (March 14), the majority (60,4%) faced problems in the operation. The most prominent point was the insecurity regarding the quality of the content. Almost 70% stated that they intend to rectify the Bookkeeping, with 79,1% saying they face problems with EFD data.

“One of the biggest difficulties is in the preparation of company registrations, at the foundation. As the vast majority of companies do not have this centralized information, this fact compromises all other operations ”, says Miriam Negreiro, consulting director at ABC71.

She points out that the responsibility for this problem begins with those who create or adequately maintain records that have tax and accounting implications and how to operate or use this data.

The study also mapped the profile of the professionals who answered the questionnaires and found that 30% are members of accounting organizations. Retail and wholesale trade also deserves to be highlighted with 8,3% and 3,6%, respectively.

The services sector had a 7,5% share. The industrial sector, on the other hand, had an expressive participation, in its various specializations, with emphasis on: automobile (3,4%), consumer goods (2,8%), steel and metallurgy (2,3%). The construction sector was represented by 3,2%.

Underground economy should stop falling in 2012

With economic growth forecasting between 3 and 3,5%, which, together with the possible impacts of the European crisis, should reduce the warming of the labor market and restrict the pace of credit expansion, 2012 points to a stagnation in the reduction in the underground economy observed in 2011.

Last year, Brazil maintained a strong economy and a scenario that encouraged the formalization of employment in the face of the need for access to credit. More credit means more money in the formal economy. For Fernando de Holanda Barbosa Filho, a researcher at Ibre / FGV and responsible for preparing the Underground Economy Index, this scenario favored the fall observed in 2011.

In his analysis, based on the results of the Underground Economy Index released in December 2011 (which fell to 17,2% of GDP, compared to 21% in 2003), he reaffirmed that the need for access to credit remained the main motivator formalization of employment by employees. “For employers, in addition to access to credit, another factor of influence was the improvement in the level of activity in the country,” says Barbosa Filho.

The forecasts for 2012, however, point to a much more conservative scenario. For former Finance Minister Marcílio Marques Moreira, president of the ETCO Advisory Council, the Brazilian GDP growth should be 3,5% this year. "There is a risk of a worsening in the world panorama, especially if one or more countries in Europe go into trouble," he points out.

For Barbosa Filho, “2012 must be a year of stagnation in the reduction of the underground economy, as we must have a period with more stable economic growth and a more stable job and credit market, which should imply a reduction in the growth of the formalization of our economy. ”. He points out as the main factors the restriction of the pace of credit expansion - as a result of the European crisis -, and the reduction of the warming of the labor market, with unemployment in the historical minimum, since, for him, despite the measures adopted by the government, the growth of the economy should be, at best, around 3%. "Productivity is growing very little in our economy," he says.

Marcílio Marques Moreira points out that, in addition to the lack of productivity, there is also the low competitiveness and innovation of the industry, in addition to the absence of a more open orientation to research and development programs. "It is up to the government, the industry and also society itself to change this situation", he evaluates.

ETCO chief executive Roberto Abdenur agrees with the former minister. For him, the institutional modernization of Brazil is the cornerstone for the country to structure itself in order to reach the standards of the First World, in which the Underground Economy Index does not exceed 10% of GDP. "It is the duty of public authorities, authorities and the whole of society to keep a critical and constant eye on this issue", concludes Abdenur.