ETCO Magazine Archives

What tax reform does Brazil need?

The October 2019 edition of the ETCO Magazine covers two seminars on taxation conducted by the Institute. The Taxation and Legal Security seminar, held in June, brought together great jurists to discuss solutions to the problems of the Brazilian tax system and was coordinated by the president of the ETCO Advisory Council, Everardo Maciel. It featured presentations by tax attorneys Heleno Torres, Roberto Quiroga, Humberto Ávila, Hamilton Dias de Souza and Gustavo Brigagão.

The Seminar on Taxation in Brazil, held in July, in partnership with the newspaper Valor Econômico, had lectures by ETCO's executive president, Edson Vismona, Everardo Maciel, Roberto Quiroga, economist Marcos Lisboa of federal deputy Efraim Filho, and Phelippe Toledo Pires de Oliveira, Deputy Attorney General of the National Treasury.

Check here these and other articles from ETCO Magazine.

Everardo Maciel explains why he doesn't believe in projects that suggest refounding our tax system

THE NEW SEASON OF TAX REFORM

by Everardo Maciel *

Tax systems are living models that portray the complexity of economic and social relations in a society. There are many reasons against overly ambitious tax reform claims

The imperfection and complexity of the Brazilian tax system, which are, moreover, characteristics common to all tax systems, stimulate a profusion of plastically elegant and disruptive solutions, but which ignore the risks and costs inherent to any change.

Tax systems result from clashes that involve conflicts of reason and interest in parliaments. They are not models, applications or, in the past, works by copyist monks. On the contrary, they are living models that portray the complexity of economic and social relations in a society. They are therefore inevitably imperfect and complex.

This complexity, in turn, is increasing, because tax systems will, over time, incorporate changes - some legitimate, others not - that distort the original conception.

Imperfection and complexity stimulate new conceptions aimed at refounding tax systems, in the context of an improbable and little useful idealization.

Peremptory statements are frequent that denounce the complexity, inefficiency and regressiveness of the Brazilian tax system, without there being a minimally consistent debate on the matter.

There are many possibilities for qualifying complexity. What makes a tax system truly complex is the overload of bureaucratic requirements, the profusion of special regimes and the indeterminacy of concepts and procedural delays that lead to legal uncertainty.

Issues such as number of rates or taxes and overlapping incidences are easily overcome by using good computer applications.

Problems exist and will always exist, which is an excuse for continuous action focused on strategic matters, aiming at eliminating or mitigating them.

The problems of ICMS and PIS / Cofins are remedied with surgical changes.

There are many reasons against overly ambitious tax reform claims.

Changes have costs and risks. Normative stability, in the tax sphere, is a relevant asset for deciding on private investments.

In an interview with Veja (27/09/2017), Eldar Saetre, president of Statoil (Norwegian state oil company), stressed that his major concern in relation to Brazilian taxation was unpredictability. He added that, in Norway, the taxation of oil activity was high (78%), but stable.

In an interview with the Financial Times, published in Valor (28/04/2017), Warren Buffet, one of the largest investors in the world, said: “People invest when they think they can make money, and not because of taxation”.

In addition, there are risks to the treasury and the taxpayer. Any change has repercussions on tax rates and tax bases, in an unpredictable way and differently on taxpayers.

Ultimately, major changes can take on an adventurous character. Anyway, systems, like the tributary, are only well known with real mass.

In everything, we cannot forget our undying vocation to copy models from other countries, built under peculiar circumstances and different from ours. It is cultural servility, opposite and equally mediocre of xenophobia in the field of ideas.

The most serious thing is that we seek to copy models in frank obsolescence, such as the Value Added Tax (VAT), which is complex, vulnerable to evasion (the carousel or banknote ride is a well-known evasion modality in Europe) and unable to assimilate properly the digital economy.

It is good to pay attention to what is being discussed at the border of tax policy. With a solid academic basis, the United States is already discussing the formulation of a model for taxing consumed income, which aggregates VAT and Income Tax characteristics, innovating them.

Meanwhile, in Brazil, little or no attention is paid to our most severe tax illnesses: bureaucracy, conceptual indeterminacy and the tax process.

Bureaucracy reigns triumphantly in the tax system. Its pearls are multiple registration, negative certificate requirements, tax refunds, obstacles to compensation, etc.

It is certain that conceptual indeterminacy will always exist, demanding the clarifying intervention of Justice. After all, there is no closed concept system. What is reprehensible is exaggeration.

We have not yet pacified concepts such as billing, gross revenue, indemnity for tax purposes, irregular dissolution of companies, joint liability of partners, tax substitution, abusive tax planning, etc. It's an absurd.

The process, from launch to execution, is exquisite in its slowness and inefficiency.

In the Union, the amounts under administrative and judicial discussion added to the credits recorded in active debt correspond to more than double the annual tax collection.

A report produced by the National Council of Justice (CNJ) shows that of the impressive 80 million cases pending in court, approximately 30 million are related to tax enforcement.

Although it contradicts the bureaucracy and the litigation industry, the real reform is to eliminate these tax illnesses. However, it lacks the charm of designing a new, unpredictable and unnecessary tax model.

Ambitious claims, by exacerbating tax conflicts, including in the context of fiscal federalism, always end in impasses, in addition to removing the focus of Brazilian tax illnesses. It is worth remembering Einstein's teaching: “it is insanity to keep doing the same thing and expect different results”.

Research shows relationship between tax burden and smuggling

Work compared products with opposite trajectories in relation to the level of taxes and the size of the illegal market

Tougher laws, stricter policing at borders and permanent inspection at points of sale are indispensable weapons to combat smuggling. A survey released in November calls attention, however, to another factor that is at the heart of the problem: the difference in its tax burden in Brazil and in neighboring countries, especially Paraguay.

The study “The Economic Logic of Smuggling” was carried out by the Institute of Economic and Social Development of Borders (IDESF), an association that studies the problems of cities located in border regions. He makes a comparison between the computer sector and that of cigarettes, which in recent years have had opposite trajectories in relation to the tax burden and smuggling.

Until the early 2000s, the computer segment was one of those that suffered most from the illegal trade. In 2005, Law 11.196 / 2005, known as the Lei do Bem, was passed, which zeroed PIS and Cofins rates in the sector. Since then, the graphs show the growth of national production and the fall in the number of seizures of smuggled computer items and leave no doubt about the cause and effect relationship between the two factors.

In 2006, seizures of computer products made by the Federal Police - which always represent a minuscule portion of smuggling - were estimated at US $ 12 million. In the years that followed, that number dropped steadily, ending 2016 below $ 2 million. In the same period, the production of Brazilian industry jumped from less than 4 million to more than 12 million computers per year, with sales jumping from R $ 4 billion to R $ 10,7 billion.

The cigarette sector is experiencing a reverse movement. Since 2012, taxes on the product have been rising year on year due to a tax policy supposedly designed to discourage consumption via price increases to consumers. According to the IDESF survey, however, the main consequences were the fall in national production and the increase in smuggling - with all the losses that this type of crime causes, including loss of revenue and encouragement to organized crime.

ALMOST HALF OF THE MARKET

From 2012 to 2016, the price of Brazilian cigarettes rose 148%, while Brazilian production fell 40,29%. In contrast, contraband exploded. In 2012, seizures of cigarettes brought illegally from Paraguay corresponded to 3,78% of national production. Three years later, this index had already reached 17,7%, as found by IDESF.

The figures presented in the study coincide with what has been observed in Ibope research on the consumption habits of Brazilians, including that of cigarettes. The survey has revealed an increasing presence of contraband brands, which represented 34% in 2013 and reached almost half of the country's consumption this year (48%). In the same period, the sector's tax burden rose from 65% to 71%.

The IDESF study was based on information from several sources, including tax analysis, price surveys in Brazil and Paraguay, police inquiries and interviews with people involved in the illegal trade. The data show that the smugglers' profit is directly linked to the difference between the levels of taxes practiced in the two countries, which today is higher than 50% in the case of cigarettes and 14% in computer items.

PROFIT UP TO 231%

Because of this advantage of the illicit product, criminals pay R $ 0,70 per pack of cigarettes in Paraguay and resell it in Brazil for R $ 2,40, at wholesale prices. Transportation costs, grooming of drivers, security guards and other contraband operators and expenses with corruption of inspectors and police consume 22,4% of this amount. The result is a return of 179% to 231% on the invested capital. In the same comparison, computers provide a maximum margin of 13,34%, which can even be negative. The product has become unviable for criminals.

IDESF President Luciano Barros believes that Brazil will not be able to win the war on smuggling unless it takes into account the tax issue. "The government has to understand that there is an economic logic to this type of crime," he says. “It is necessary to look beyond passenger economic benefits and measure the impacts of these decisions on the lives of Brazilians. It is no longer possible to play blindly in favor of smuggling in the name of goals that do not take into account social aspects, especially of the border populations, who are those who suffer these consequences in the most direct and cruel way. ”

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

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 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.
Good reading!

Check out the digital edition

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

Also in this edition:

The economic logic of smuggling

Study shows how excessive taxation favors organized crime. Check out.

The bad idea of creating a new tax on juices, soft drinks and soft drinks

Intention to reduce obesity by taxing sugary drinks is not supported by science and may contribute to increasing illegality in this market

A proposal under discussion in the Federal Government and in the National Congress tries to solve an extremely complex problem through a simplistic measure. It is the idea of combating obesity with the creation of a new tax on non-alcoholic drinks that contain sugar in their composition, such as soft drinks, juices and soft drinks.

Proponents of the proposal believe it would force consumption to drop and help stem the population's weight gain. But there are no studies in the world to confirm this theory and it finds resistance even among doctors and nutritionists. And it also counts on the opposition of business entities that see it as another attempt to increase the tax burden on the productive sector. ETCO is part of this group for an additional reason: the risk that the measure will benefit dishonest companies that make tax evasion the basis of their business. “In sectors that are already highly taxed, such as beverages, the higher the tax, the greater the risk of attracting illegality”, says the Institute's executive president, Edson Vismona. "The result is the deterioration of the competitive environment."

The concern has precedent. Until the early 2000s, the beverage market was one of the hardest hit by tax evaders. Factories that hid their sales from the tax authorities used this illicit advantage to practice artificially low prices and gain market share at the expense of serious companies. "At the time, tax evasion in the soft drink segment reached 30%," recalls Vismona.

In the following years, a more rigorous inspection of the sector, which included the installation of equipment for counting the packages filled in the beverage production lines, managed to reduce the problem. But the IRS abandoned this system at the end of 2016 to reduce expenses and the risk of tax evasion has returned. “Today, taxes are equivalent to 40% of the price the consumer pays for non-alcoholic beverages. Raising taxation even further, keeping inspection loose as it is, is folly ”, warns Vismona.

SERIOUS AND COMPLEX PROBLEM

The advance of obesity is a very serious disease that affects the whole world. According to the World Health Organization (WHO), since 1975, the rate of obese people on the planet has tripled. In Brazil, it rose from 11,8% to 18,9% only in the last ten years. Not to mention overweight Brazilians, who represent another 35% of the population. This epidemic causes enormous damage to people's health and public coffers. Diabetes, hypertension, stroke, degenerative diseases and cancer are some of the diseases related to being overweight. It is estimated that, each year, SUS (Unified Health System) spends R $ 488 million on the treatment of pathologies related to obesity.

But the problem is extremely complex. According to WHO, its roots are related to profound transformations that have occurred in the last decades. The population left the countryside for the cities; began to use means of transport and machines that reduced physical effort; many jobs today require spending the day sitting in front of the computer; sedentary lifestyle grew; the pace of life accelerated; stress and anxiety increased; more women went to work outside; it became more difficult to prepare food at home; the eating pattern has changed; and more and more people are putting on weight by consuming more calories than they spend.

To address the multiple causes of obesity, WHO has been making a series of recommendations to governments for years. There are dozens of actions that include programs to encourage sports (60 minutes a day for children and 150 minutes a week for adults); encouraging the consumption of fruits, vegetables, legumes and whole grains; educational campaigns in schools; preventive treatment in health institutions; reduced consumption of fat and sugar; changes in food labels to make their nutritional properties clearer; and other initiatives that require effort on the part of public agencies.

Last year, the organization added to this long list the suggestion to overcharge sugary drinks, a controversial idea that divides opinions around the world. This way, it became a priority. In June, the National Health Council, an agency linked to the Ministry of Health, recommended the creation of this new tax in Brazil. And a project along the same lines, authored by federal deputy Sérgio Vidigal, reached the National Congress, which held a public hearing on the theme on October 31.

INDUSTRY CONTRIBUTIONS

Leaders representing the beverage industry recognize the importance of participating in the movement to fight obesity and remember that this is already being done in the country. talked about it at the public hearing. He said that in the last six years manufacturers have reduced the amount of sugar in their products by 11% and that this reduction should reach 21% in the next four years. He also emphasized that the industry has been expanding its range of products, with the launch of drinks with different nutritional standards, including fruit juices without added sugar. And he recalled the fact that the industry as a whole decided in 2016 to stop advertising to children under 12 and that major brands, such as Coca-Cola, Ambev and Pepsico, made an additional commitment to stop selling soft drinks in schools with children that age - all through voluntary initiatives.

ABIR's president stated, however, that the industry does not accept being treated as “the main villain of obesity”, receiving discriminatory tax treatment. "A study by the research company Nielsen shows that, on average, sugary drinks represent only 4% of the daily calorie consumption of Brazilians," said Jobim. "Table sugar, the one that people add to coffee and other foods, accounts for 72% of sugar intake in the country - and is Brazil going to overcharge soft drinks?", He asked.

Data from the Federal Government itself question the relationship between the consumption of sugary drinks and the increase in obesity. According to Vigitel, a research service from the Ministry of Health that monitors lifestyle habits related to chronic diseases, in the same decade in which the obesity rate rose from 11,8% to 18,9%, regular soft drink consumption dropped from 30,9 , 16,5% for XNUMX% of the population.

The idea that increasing the tax on caloric foods may have an impact on reducing obesity also lacks scientific evidence. There are few international experiences in this regard - and the results are controversial. Proponents of the tax cite the case of Mexico, which introduced the surcharge in 2013 and recorded a 6% reduction in soft drink consumption the following year.

But the reality between the two countries in relation to this market segment is quite different. Mexico is the largest per capita consumer of soft drinks in the world. According to a study by the consultancy PwC, each Mexican drinks an average of 163 liters per year - more than double the 70 liters per capita registered in Brazil. And there, after the creation of the tax on sugary drinks, the total taxes on the product reached 28% - against the 40% that are already practiced here

REPLACEMENT BY BEER

In addition, the reduction in consumption was not accompanied by any evidence of improvement in obesity levels, which raises the hypothesis that people may have exchanged the drink for other equally caloric foods. Nutritionist Márcia Terra, director of the Brazilian Society of Food and Nutrition (SBAN), says that this possibility cannot be ruled out. She cites a study by Professor Brian Wansink, director of Cornell University's Food and Brand Laboratory (USA), which compared the behavior of two groups of American families over several months: one subject to an additional 10% fee on sugary drinks and the other is not. "In this study, there was a migration from the consumption of soft drinks to beer," says the nutritionist. In her opinion, it is necessary to better study consumer behavior to find out if such a tax has a positive, neutral or even negative effect on people's health.

MORE EFFECTIVE WAYS

Cardiologist and nutrologist Carlos Daniel Magnoni, from the Dante Pazzanese Institute, in São Paulo, agrees. Studious of the subject and active in campaigns to fight obesity, he mentions the conclusions of the research Overcoming Obesity: An Economic Analysis, carried out by the consulting firm McKinsey. The work compared several experiences of coping with the problem and concluded that there is no scientific evidence that overcharging sugary drinks reduces people's weight.

In Magnoni's opinion, there are much more effective ways that are little explored in Brazil. An example, according to him, is a project that Dante Pazzanese applies in São Paulo and intends to spread across the country called Obesity Zero. The goal is to direct more people to the nutritional guidance service and part of a simple action: measure the weight and height of all patients who arrive at the hospital, regardless of the reason. "Today, 60% of SUS patients are not heavy," he laments. "If they were, perhaps they could be better evaluated and guided from the point of view of nutrition."

Another doctor who does not believe in the effectiveness of the surcharge is professor of pediatrics Hugo da Costa Ribeiro Júnior, from the Faculty of Medicine of the Federal University of Bahia (UFBA), a specialist in childhood obesity. According to him, scientific studies confirm that being overweight is related to multiple factors, including the type of delivery, breastfeeding, food in the first thousand days, the habit of having breakfast. "All measures that disregard this complexity and seek the simplest solutions do not work and are not sustainable in the medium and long term," he says. "It is a mistake to focus on the management of specific foods: this does not educate and does not benefit from the point of view of setting up an adequate diet."

If there is no evidence that overcharging sugary drinks reduces obesity, the same cannot be said about its effects on the competitive environment. The example comes from Denmark, one of the most developed nations in the world that was also one of the first to institute a specific tax on sugary drinks, in 1930. The tax was in force for 83 years. During this period, the Danes paid the equivalent of R $ 0,85 in additional tax per liter of soft drink. In 2013, the surcharge was abolished - among other reasons, by stimulating the illegal beverage trade from neighboring Sweden and Germany, exempt from the tax. There, research shows that more than eight decades of tax to discourage soft drink consumption has only favored smuggling.

The Brazil we want

This is the theme of the campaign supported by ETCO against smuggling, an evil that robs the market of national companies, fuels organized crime and bleeds public coffers.

The numbers are frightening: with this value, which corresponds to the wealth that Brazil stopped producing in 2016 because of smuggling, it would be possible to build more than 1,3 million popular houses, a thousand hospitals, 65 thousand daycare centers or 25 thousand public schools . These are losses that no country can afford to ignore - let alone let them grow year by year, as has been happening. The exhibition was one of the actions of the O Brasil que Nós Queremos campaign, carried out by the Movement in Defense of the Brazilian Legal Market. The Movement was created by ETCO and the National Forum Against Piracy and Legality (FNCP) and has the support of 70 entities. The objective is to join forces and mobilize authorities from the three branches of government and society in the fight against these illegal practices.

Watch: The Brazil We Want (video)

ORGANIZED CRIME

“The country in which we all want to live one day can only begin to be built if we leave aside the rhetoric and move on to immediate and effective change actions that have everyone's commitment,” says Edson Vismona, ETCO's executive president. In our experience, improving the business environment, simplifying entrepreneurial activities, and fighting corruption and illegality are the ways to reach this dream country. In addition to damaging Brazil economically, activities such as cigarette smuggling finance organized crime, increasing the levels of violence that afflict the population every day. What we need is to evolve, once and for all, from discourse to practice, with measures that actually monitor and curb these activities, encouraging the industry to return to invest and trade to sell. ”

At an event in Brasília, Edson Vismona demanded less rhetoric and more action against smuggling

Another campaign action involved the Folha de S. Paulo newspaper. Whoever went to the newsstands or received the publication at home on March 29 was surprised by the headlines on the front page. The main one said: "Paraguayan smuggling falls to the historic minimum". And the others brought other "good news" related to the problem, such as the victory of the State in the war against gangs that use contraband to finance drug trafficking and other crimes: "Public power resumes neighborhoods on the outskirts of São Paulo". Unfortunately, these were not real headlines, but an advertising jacket with news of the dreams of a country that had already managed to solve the problem of smuggling.

LEGISLATIVE SUPPORT
The problem was discussed by experts on August 3, at an event that was held at FIESP to commemorate the first State Day to Combat Smuggling in São Paulo. The date was established by a bill by Congressman Jorge Caruso (PMDB), from the recently formed State Front to Combat Smuggling. The objective is that every year, on that day, paulistas can debate the challenges and results of this struggle. “Smuggling is an activity dominated by gangs like the PCC. Criminals use
the profits generated by smuggling to finance other crimes such as drug and arms trafficking, ”says Caruso.
The São Paulo legislature follows the good example of the National Congress, which created a Parliamentary Front two years ago with the
same purpose, chaired by federal deputy Efraim Filho (DEM / PB).

Ephraim Son

“Efforts to combat illicit practices must be
unified. It no longer makes sense for the public authorities, parliament and organized civil society to act in isolation and uncoordinated, ”says Efraim.

In addition to harming the country's economy and development, smuggling brings products to the Brazilian market without quality control and hygiene, which endanger consumers' lives and health. The list includes everything from sunglasses that cause damage to the retina to sharp and sharp toys, unsuitable for children, and cigarettes with rat hair and cockroach paws, which end up being inadvertently consumed by the population. In the same vehicles and schemes used to smuggle these products, the
Criminal factions also bring weapons and drugs that fuel violence in large cities. “The fight against illegality
it is a struggle for life. The violence that is on the streets, and that frightens us so much, is financed by smuggling, ”says Vismona.

SUPPORT FROM THE MINISTRY OF JUSTICE
The Brazilian population agrees. In a recent survey conducted by Datafolha, at the request of the Movement for the Defense of the Brazilian Legal Market, 84% of respondents said they believed in the link between cigarette smuggling and organized crime.

DATAFOLHA SEARCH

Combating the problem requires a constant effort by all actors in society and the effective engagement of the Federal Government in the inspection of our borders. In March, as part of the O Brasil que Nós Queremos campaign, ETCO agreed with the Ministry of Justice to sign a protocol of intentions, which includes a set of measures and intelligence actions to
suppress smuggling in the national territory.
Only then, by joining efforts, will Brazil be able to get rid of this culture of illegality more quickly and, consequently, increase tax collection, invest more in social programs, curb the consumption of products harmful to the health of the population and reduce violence and violence. performance of organized crime in large cities.
“The Brazil we want is the country of order and progress, which generates wealth, jobs and development for all Brazilians”, reinforces Vismona.

Contraband: São Paulo against crime

The largest consumer of contraband products in the country, the State creates a parliamentary front to combat activity

Last year alone, the São Paulo government lost more than R $ 3,1 billion in taxes due to the smuggling of tobacco, auto parts, electronics, drinks and fuels. The State is the national champion of contraband products and also one of the main centers of distribution of these goods to the rest of the country.

The money that the State failed to collect in 2016 would give to build 26 new hospitals or 107 new CEUs. In order to stop these losses and fight crime, the Legislative Assembly created in June the State Parliamentary Front to Combat Smuggling, led by state deputy Jorge Caruso (PMDB). “It is clear that an important part of this struggle has to be fought on Brazilian borders, as we need to close the doors for the illegal entry of products from Paraguay. But another important front of action must be combating trade in these goods in our cities ”, justifies Caruso. “This is the responsibility of state governments and city halls, which already have several mechanisms to achieve this objective, whether in the area of intelligence and repression, or tax policies that remove from smuggled products their main advantage over those manufactured legally in the country: the price . ”
The Parliamentary Front also intends to propose laws to reinforce the fight against crime, demand more repressive action from the executive branch and take the discussion to the whole society through mobilization actions and public debates. “To fight against smuggling in the State is to fight for citizenship and for the realization of a reality desired by the entire population of São Paulo”, remembers ETCO's executive president, Edson Vismona.

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The Brazil we want

This is the theme of the campaign supported by ETCO against smuggling, an evil that robs the market of national companies, fuels organized crime and bleeds public coffers.

Contraband: São Paulo against crime

The largest consumer of contraband products in the country, the State creates a parliamentary front to combat activity