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)

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