Tag: taxation

Fake tax credits: why is this trap so recurrent?

Source: Jornal Indústria & Comércio (Curitiba - PR) - 16/05/2012

We often read news reports that the IRS has been discovering fraud related to scams involving false tax credits for tax relief and federal contributions. The news is alarming with regard to the values ​​and number of companies that use this practice. Currently, the IRS of São Paulo has discovered a scam in which the creation of false credits was improperly launched by more than 100 million. The big question is repeated all the time, as the IRS has a period of five years to inspect and assess, through the PER / DCOMP system, scammers are able - with the filling of simple forms - to manipulate these compensations.

The big move made by scammers is precisely in the situation where they demonstrate credibility, as they charge only after the debts have been written off in the system. However, companies are unaware that in up to five years such operations are inspected as to the origin and legitimacy of these credits and, when detected, debts return with heavy fines along with a criminal case.

Legislation in relation to credits and compensation is highly technical and complex, with several norms, which confuses and often succeeds in even deluding legal operators and businessmen, by hiring various consultants, accountants, lawyers and other professionals in the business environment, in illusion that they would be involved in something lawful, profitable and advantageous for their customers.

This fact happened this week in São Paulo, but it certainly became reality in other states of the Federation, and for quite some time. The question we must ask is the following: even with so much technology in the current scenario, with the IT system of the ultramodern Revenue, in addition to records of annual collection, why intelligent mechanisms have not yet been established to contain these frauds, changing the system inspection and compensation?

The IRS has in its hands an advantage and the convenience of five years to inspect the compensation, if it finds distortions or fraud to apply fines greater than 150% and penal action to those involved. I think that, in the face of a massive tax burden, it is natural for businessmen to be seduced by tempting offers, some illegal and others legitimate, as well as the increasingly frequent use of precatories to compensate ICMS in several States of the Federation.

Going further, the heavy burden of taxes that drive companies to despair in order to remain active, also generates a parallel market that feeds on the anguish of businessmen to circumvent such fiscal tyranny.

Thus, in addition to the proper ways of inspecting illegalities and punishing those who illegally commit these frauds, it is worth reflecting that this may also be only a consequence of much larger causes, of political, economic and, mainly, taxation. In short, the long-awaited and expected tax reform, simplifying and significantly reducing taxes, stimulating the industrial chain in the country, privileging consumption and generating employment and development, would be the best inspection mechanism, as satisfied and prosperous businessmen would greatly reduce this parallel market of tax magic, evasions and desperate attempts to reduce costs.

Daniel Moreira - Managing partner of Nagel & Ryzewski Advogados

 

Experts show the importance of Article 146-A of the Constitution

By Oscar Pilagallo

ETCO Magazine, No. 16, September 2010

Almost seven years after the publication of a constitutional amendment that provides for special taxation criteria to prevent imbalances in competition, the text approved by parliamentarians is still awaiting regulation. It was, therefore, marked by the feeling of necessary urgency and in defiance of the waiting rhythm that, on May 10, the seminar on Competition Tax Imbalance and the Brazilian Constitution was held in Brasilia.

Almost seven years after the publication of a constitutional amendment that provides for special taxation criteria to prevent imbalances in competition, the text approved by parliamentarians is still awaiting regulation. It was, therefore, marked by the feeling of necessary urgency and in defiance of the waiting rhythm that, on May 10, the seminar on Competition Tax Imbalance and the Brazilian Constitution was held in Brasilia.

Ambassador Marcílio Marques Moreira, President of the ETCO Advisory Council, speaks during the event in Brasília. At the table, Humberto Ávila, specialist in Tax Law, André Montoro, President of ETCO, and Tércio Sampaio Ferraz Júnior, professor at USP Law School

Promoted by ETCO and the Federal Magistrates School of the First Region, the seminar brought together experts to discuss the regulation of Article 146-A. “The imbalance of competition generated by non-compliance with legal obligations has serious repercussions on the Brazilian economy,” said André Franco Montoro Filho, ETCO's Executive President, at the opening of the works.

Published on December 19, 2003, Article 146-A, resulting from Constitutional Amendment 42, which is at the center of the debate, says the following: “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 ”.

Tax experts identify in this short text a rule and a principle. The rule is explicit: it is an authorization to establish special criteria for taxation. But there is also an underlying principle, that of tax neutrality, that is, the principle that taxes should not cause harmful effects to free competition.

The fact that the article has not yet been regulated does not mean, however, that it has no effect. For Rafael Favetti, Executive Secretary of the Ministry of Justice, who represented Minister Luiz Paulo Barreto at the event, despite the lack of regulation, the article in question already weighs on judicial decisions. "The mere existence of the amendment has a natural force that radiates to judges throughout Brazil," he said. “This article, even without the regulations, means the following: 'Magistrate, when interpreting any tax situation, it is also necessary to take into account the issue of competition'.”

Favetti's opinion is shared by Sampaio Ferraz Junior, a professor at USP Law School. "On the legal level, the mere existence of Article 146-A creates a hypothesis of argument to be used in taxation," he said. Sampaio Ferraz cited as an example a decision by the Federal Supreme Court on the case of American Virginia Tobbaco, which requested preliminary measures to continue operating after being closed by the IRS for not paying taxes. The STF understood that the cigarette manufacturer should really be closed, since the practice unbalanced competition.

Taxes have a strong impact on the market. Hamilton Dias de Souza, a lawyer specializing in Tax Law and an ETCO advisor, took a random example - that of the soap industry - to demonstrate the weight of just one tax, the ICMS with an 18% rate on the profit margin. If the obligation is not paid (for any reason, including tax evasion), the profit of the favored company will be 388% higher than that obtained by the competitor who pays the full tax.

For Souza, however, article 146-A does not address issues between companies. "The protected property is public, not private," he said. “When we talk about the market, we are talking about the market as national heritage”, that is, the market as a necessary environment for the exercise of free enterprise, a foundation of the Brazilian economic order, in the terms expressed in the Constitution.

The observation was endorsed by Marcílio Marques Moreira, former Minister of Finance and president of the ETCO Advisory Council. Quoting Raghuram Rajan and Luigi Zingales, economists at the University of Chicago and authors of the book Saving Capitalism from Capitalists, Marques Moreira said that “fair market competition is a public good because it allows for innovation, efficiency, work and, therefore, , must be protected by the State ”. The former minister emphasized that such behavior involves ethics, in line with the thinker Nicolau Maquiavel (1469-1527), who establishes a close link between civic morality and healthy political life. Marques Moreira recalled what the Florentine said in Discourses on the first decade of Tito Lívio: “As good customs, to maintain themselves, they demand laws, so also laws, to be obeyed, they demand good customs”.

Hamilton Dias de Souza, specialist in Tax Law; Ambassador Marcílio Marques Moreira

Humberto Ávila, specialist in Tax Law; Everardo Maciel, former Secretary of Federal Revenue and Luis Eduardo Schoueri, professor of Tax Law at the Faculty of Law of the University of São Paulo give a lecture during the seminar

André Montoro, President of ETCO; Otacílio Cartaxo, Secretary of Federal Revenue and Luiz Fux, Minister of the Superior Court of Justice (STJ), speak to the participants in the seminar on Tax Competition Imbalance and the Brazilian Constitution

In the same pitch, André Franco Montoro Filho affirmed that tolerance with unbalanced competition “benefits the transgressor, harming those who comply with the law”. For him, if the damage to competition is not combated, the message that will be given to entrepreneurs is that misconduct is the best way to earn money. “This type of behavior attracts opportunists and drives away those who want to invest in production, which are the ones who generate growth.” When dimensioning the problem, the ETCO Executive President recalled that what distinguishes Brazil is not only the high tax burden, but especially the high proportion of indirect taxes. Montoro estimates that 70% of taxes in Brazil are indirect, that is, taxes on production, in addition to contributions on wages. "I believe that Brazil is the country that has the highest indirect tax burden in the world - and it is exactly this type of tax that gives the tax evader a huge competitive advantage."

To curb evasion and other crimes that unbalance competition, Luiz Fux, Minister of the Superior Court of Justice, defended preventive action. He recalled that there is in Italian law, in the chapter on competition, a device that allows action before the violation, the so-called injunctive relief. "The state cannot act only repressively," he said. Recognizing that tax issues are complex and intricate, Fux recommended, in line with the objective of defending competition expressed in Article 146-A, that courts should make more frequent use of the figure of the amicus curiae, the “friend of the court”, or that is, the person or entity that, aware of the cause in question and distant from the conflicting interests, can assist the magistrate in extremely specialized matters. He also affirmed that, as a member of the STJ, he even determined the intervention of Cade (Administrative Council for Economic Defense) as amicus curiae.

For Luis Eduardo Schoueri, professor of Tax Law at USP Law School, the “friend of the court” will be fundamental in the assessment of cases in the light of article 146-A. "We are going to ask those who understand whether competition is being affected or not," he said. This is because, for him, “the existence of a tax advantage will not necessarily imply a predatory price”. The opposite may even happen, he argued. A certain tax immunity, for example, can make an economic agent viable, thus increasing competition. "We will have to learn to advocate again," he told his peers, noting that lawyers are not used to producing evidence, necessary to verify whether, in each case, the market has been affected - hence the importance of Amicus curiae.

Schoueri's opinion found an echo in the speech of Humberto Ávila, a specialist in Tax Law. Ávila considered that if, in a given universe of taxpayers of the same tax, two of them do not pay, the solution is not to change the taxation because of that minority, but only to make inspection more efficient. "But if this non-compliance is so fragmented that there is a practical administrative impossibility of knowing who is evading, then we can make everyone's regime different," he said. For him, “the assumption of the imbalance is that it is intense and fragmented, because otherwise it does not affect the competition”.

Rafael Favetti, Executive Secretary of the Ministry of Justice and Tércio Sampaio Ferraz, professor at USP Law School

In this direction, Ávila believes that one of the great contributions of the complementary law will be to standardize and predict the tax substitution mechanism. According to this mechanism, taxes spread over a productive chain (multi-phase) are collected at once, as if it were just a tax (single-phase). States make this tax substitution, but, says Ávila, each one does it in their own way. "There are no general rules," he said. "Therefore, I see the complementary law in order to ensure predictability in those normative spheres in which there is a continuous and systematic lack of uniform application of tax legislation."

For Everardo Maciel, former Secretary of Federal Revenue and ETCO advisor, although tax substitution can be an instrument to prevent competitive imbalances, it presents a weakness, which is the presumption of margins. “This presumption stems from research that intends to calculate a margin differentiated by product. But it is a false assumption because it is practically impossible to measure these margins effectively. ” And even if, hypothetically, this were possible, argues Maciel, one would know "what happened yesterday, and taxation informs what will be happening tomorrow". For him, the only alternative would be to consider the tax substitution as an anticipation, to be eventually offset later. The seminar held by ETCO promoted a real exegesis on the text of article 146-A. There is now a lack of regulation, which is more and more urgent because competitive imbalances due to tax factors are growing at the same rate as elision, tax evasion and tax evasion.

Mariana Tavares de Araújo, Secretary
of Economic Law, during a lecture

The role of Cade and the Federal Revenue Service

Government representatives present at the Seminar Competitive Tax Disequilibrium and the Brazilian Constitution, promoted by ETCO, spoke about limitations and initiatives of the State's action in the defense of the balance of competition.

Mariana Tavares de Araújo, at the head of the Economic Law Secretariat, a body linked to the Ministry of Justice, acknowledged that Cade, an autarchy in the same portfolio, can do little in some cases. Cade, for example, has no competence to restrain state incentives that may threaten the competitive balance. "Cade can comment on distortions in competition, generated by tax incentives, but in view of the preservation of the federal pact, it cannot impose sanctions on states," he said. She has recommended to companies that feel harmed by these practices that they knock on another door: “The effective ways to face these measures that distort competition all pass through the Judiciary”.

The most that the autarchy can do, according to the secretary, would be to go to court, through the Public Ministry, if its analysis identified damage to the competition. What, then, is the main role that the Brazilian competition defense system could play? For Mariana Tavares de Araújo, the role is educational. "I hope you will agree with me that there is a role in spreading the culture of competition, which, in the medium and long term, is as or more important than the application of a sanction."

Otacílio Cartaxo, Secretary of the Federal Revenue Service, defended the action of the governing body. "The Federal Revenue, through the isonomic application of tax legislation, contributes to providing competitive balance between companies," he said. In practice, to achieve this goal, the IRS has introduced two systems aimed at controlling the production of cigarettes and beverages, sectors with a high tax burden. This is Scorpios, which counts the cigarette units produced, and Sicobe, which measures the flow of liters of drinks.

Car taxo also mentioned the recent creation of two Federal Revenue offices, in São Paulo and Rio de Janeiro, aimed at the largest taxpayers. "Often tax evasion takes complex forms and is crossdressed by corporate adjustments and agreements that have no other purpose than the evasion of the tax," he said. To distinguish effective mergers from fraudulent simulations, the two police stations have a highly specialized technical staff, said Cartaxo.

Also with the objective of combating tax evasion, said Cartaxo, the SPED (Public Digital Bookkeeping System) was created, having as one of its components the NF-e, an initiative with the support of ETCO. At the event in Brasília, ETCO received from Encat (National Meeting of State Tax Coordinators and Administrators) a prize in honor of the mark of 1 billion electronic invoices issued in the country that, in addition to collaborating to combat tax evasion, avoided, with the saved paper, the felling of more than 400 thousand trees.

André Montoro, President of ETCO, receives from Otacílio Cartaxo, Secretary of Federal Revenue, and Eudaldo Almeida Jesus, General Coordinator of Encat, award for the mark of 1 billion electronic invoices issued in the country

 

Book Tribute to the Market discusses the imbalance in competition between companies

With this new work, ETCO places at the center of the discussion one of the most important themes for a country's economic development: combating competition imbalances and ensuring an ethical and healthy business environment. With a final text by journalist Oscar Pilagallo, the book is the result of the Seminar on Tax Competition Imbalance and the Brazilian Constitution, which ETCO and the Federal Magistrates School of the First Region provided in Brasília in May this year, with the aim of discussing the article 146-A, which is part of constitutional amendment 42 and provides for special taxation criteria to prevent imbalances in competition between companies.

The event was attended by authorities and experts on the subject, such as: • André Franco Montoro Filho, chief executive of ETCO; • Everardo Maciel, former IRS secretary and ETCO advisor; • Hamilton Dias de Souza, specialist in Tax Law; • Humberto Ávila, specialist in Tax Law; • Luís Eduardo Schoueri, professor of Tax Law at the Faculty of Law of the University of São Paulo; • Luiz Fux, Minister of the Superior Court of Justice (STJ); • Marcílio Marques Moreira, former Minister of Finance and president of the ETCO Advisory Council; • Mariana Tavares de Araújo, secretary of Economic Law; • Otacílio Cartaxo, Federal Revenue Secretary; • Rafael Favetti, executive secretary of the Ministry of Justice; • Tércio Sampaio Ferraz Júnior, professor at the Faculty of Law of the University of São Paulo.

Taxes, competition and Article 146-A of the Constitution

Source: Last Instance Portal, 15/12/2010

By Hamilton Dias de Souza and André Franco Montoro Filho

Any tax interferes with the market. The tax burden impacts costs and can significantly change economic results. For this reason, the tax burden of agents competing in the market should, in principle, be uniform. If some are more costly than others, there will be artificial competitive advantage, since it does not result from greater efficiency. The precept of isonomy will then be wounded and, at the same time, the principle of free competition, damaging the exercise of free initiative, which is the foundation of the economic order.

It is the responsibility of the Public Power to take the necessary measures so that the tax is neutral in relation to the functioning of the market. This is what is called the “tax neutrality principle” which has two aspects: the negative and the positive. The negative aspect prevents the tax rule from being formulated in a way that privileges competitors (inequality in the law). The positive imposes the adoption of corrective measures aimed at making the tax burden legally established (inequality in the application of the law) effective.

Article 146-A of the Federal Constitution is a rule designed to legitimize the production of tax rules aimed at achieving the positive aspect of tax neutrality. He says that “a complementary law may establish special criteria for taxation, with the objective of preventing imbalances in competition, without prejudice to the Union's competence, by law, to establish norms with the same objective”.

This provision provides that a complementary law may establish parameters to be observed by the Union, States and Municipalities, for the creation of differentiated tax liability regimes in order to avoid or resolve competitive imbalances caused by the actions of individuals who use the tax to obtain competitive advantages. spurious. Competitive problems arising from non-tax causes or from government acts are outside the scope of the standard.

The special criteria are designed to make the correct payment of the tax feasible, when the general regime proves to be insufficient. Through them, some taxpayers are taxed differently from the others, however, with the objective of leveling the tax burden (tax function) that would otherwise be unequal, thus preventing possible competitive imbalance (extra-fiscal function). For example: if the normal IPI taxation regime, due to the value of the goods, presents application failures that compromise the regular functioning of the market, a special system of collection by fixed rates, which take into account, in its graduation, may be adopted. , the prices normally charged. In this sense, there is no breach of isonomy, but strict observance of the precept contained therein.

It must be made clear, however, that being instruments for the realization of tax justice, the special taxation criteria cannot be used in order to increase the tax burden.

Special taxation criteria can interfere with the elements of the main obligation (material criteria), or establish new ancillary obligations (formal criteria). The material criteria include: single-phase taxation, anticipation of the taxable event, fixed or specific rates, guidelines for minimum amounts. There are types of formal criteria: special inspection regimes, weight, volume or flow meters, proof of fiscal regularity, conditioning of non-cumulative tax credits to the payment of the tax in the previous transaction, special payment regime.

The elaboration of a complementary law that regulates article 146-A of the Federal Constitution is of extraordinary importance for the preservation of a healthy business environment in our country. The complementary law will establish general rules defining, essentially, the special taxation criteria that can be adopted, the competitive imbalances that justify them and the conditions and limits to be observed in your institution. As a result, tax administrations will have uniform parameters to produce norms that tend to neutralize competitive advantages based on tax violations. Taxpayers, in turn, will be protected by the limitations to be established in order to avoid possible abuses, even if under the pretext of defending free competition.

Launch

Today, 15/12, starting at 19:30 pm, ETCO launches, at MAM, the book “Tribute to the Market, Competitive Imbalance and the Constitution, Um Debate”, a work that reports the points discussed in the Seminar “Competitive Tax Imbalance and the Constitution Brasileira ”conducted by ETCO in May to discuss Article 146-A of the Constitution.

Oscar Pilagallo translates into journalistic language all the richness of the debate held at the Seminar, which was attended by:

* André Franco Montoro Filho, chief executive of ETCO;

* Everardo Maciel, former secretary of Receita Federal and ETCO advisor;
* Hamilton Dias de Souza, specialist in Tax Law;
* Humberto Ávila, specialist in Tax Law;
* Luís Eduardo Schoueri, professor of Tax Law at the Faculty of Law of the University of São Paulo;
* Luiz Fux, Minister of the Superior Court of Justice (STJ);
* Marcílio Marques Moreira, former Minister of Finance and president of the ETCO Consultative Council;
* Mariana Tavares de Araújo, Secretary of Economic Law;
* Otacílio Cartaxo, secretary of Federal Revenue;
* Rafael Favetti, executive secretary of the Ministry of Justice;
* Tércio Sampaio Ferraz Júnior, professor at the Faculty of Law of the University of São Paulo.

Service

Book release “Tribute to the Market, Competitive Imbalance and the Constitution, A Debate”

Author: Oscar Pilagallo

Date: 15/12/10, Wednesday

Place: São Paulo Museum of Modern Art (MAM)

Address: Ibirapuera Park, gate 3, no number, São Paulo, SP

Time: 19h30

 

ETCO's new book, “Tribute to the Market”, discusses the imbalance in competition between companies

Source: Portal Fator Brasil - Rio de Janeiro / RJ - 15/12/2010

São Paulo - The Brazilian Institute of Competitive Ethics (ETCO) launches the book “Tribute to the Market, Competitive Imbalance and the Constitution, Um Debate”, on December 15, at 19:30 pm, at the Museum of Modern Art of São Paulo (MAM) , at Ibirapuera Park - Portão 3. With this new work, ETCO places at the center of the discussion one of the most important themes for the economic development of a country: combating competition imbalances and ensuring an ethical and healthy.

With a final text by journalist Oscar Pilagallo, the book is the result of the Seminar on Competition Tax Imbalance and the Brazilian Constitution, which ETCO and the Federal Magistrates School of the First Region provided in Brasília in May this year, with the aim of discussing the article 146-A, which is part of constitutional amendment 42 and provides for special taxation criteria to prevent imbalances in competition between companies. The event was attended by authorities and experts on the subject, such as: André Franco Montoro Filho, chief executive of ETCO | Everardo Maciel, former Federal Revenue Secretary and ETCO advisor | Hamilton Dias de Souza, specialist in Tax Law | Humberto Ávila, specialist in Tax Law | Luís Eduardo Schoueri, Professor of Tax Law at the Faculty of Law of the University of São Paulo | Luiz Fux, Minister of the Superior Court of Justice (STJ) | Marcílio Marques Moreira, former Minister of Finance and president of the ETCO Advisory Council | Mariana Tavares de Araújo, secretary of Economic Law | Otacílio Cartaxo, Federal Revenue Secretary | Rafael Favetti, executive secretary of the Ministry of Justice | Tércio Sampaio Ferraz Júnior, professor at the Faculty of Law of the University of São Paulo.

For André Franco Montoro Filho, the presence of the most important thinkers on the topic resulted in a deep immersion in the intricacies of the competitive imbalances caused by tax factors. “This topic has never been debated with such depth and knowledge,” reports Montoro Filho, to whom “the publication of Tribute to the Market is one of the most important contributions to combat these imbalances that are growing at the same speed as they are increasing in our country. avoidance, tax evasion and tax evasion ”.

The Author - Journalist Oscar Pilagallo is the author of “The History of Brazil in the 20th Century”, “Brazil in Sobressalto” and “A Aventura do Dinheiro”. He participated in the collective work “Música Popular Brasileira Hoje”. He is a contributor to Folha de S.Paulo, where he was a special reporter and editor of the “Dinheiro” and “Sinapse” sections. In 2005, he created EntreLivros magazine, which he edited for two years. Born in São Paulo, he lived in London between 1986 and 1991, when he worked at the BBC Brazilian Service. In 1993, he received the Esso Specialized Reporting Award.

ETCO- Founded in 2003, the Brazilian Institute of Ethics in Competition is a civil society organization of public interest -OSCIP- with the objective of promoting competitive ethics to improve the business environment and stimulate economic growth. To this end, it develops actions to combat competitive imbalances caused by tax evasion, informality, forgery and other misconduct. It also seeks to raise society's awareness of the social harms of unethical practices and their negative effects on the country's growth. The ETCO comprises: six sectoral chambers bringing together companies in the technology, medicine, fuel, tobacco, beer and soft drink segments.

[Launch of the book “Tributo ao Mercado”, by ETCO | Author: Oscar Pilagallo, on December 15 (Wednesday), at 19 pm, at the Museum of Modern Art of São Paulo (MAM), Ibirapuera Park, gate 3, no number, São Paulo, SP.

 

Dilma faces challenges before taking office

Source: Jornal do Comércio - Porto Alegre / RS - 08/11/2010

Expectations abound and there are no doubts about the conduct of the future president Dilma Rousseff on topics considered priority by leaders of business entities and specialists

"They are already talking about more taxes." The outburst was made by the vice president of the metal-mechanic area of ​​the Rio Grande do Sul Steel Association (AARS), Sergio Neumann. When asked about projections for the future Dilma government, Neumann mixed expectation with mild unrest. “Wasn't it supposed to lower taxes? Now they talk about reissuing the CPMF ”, criticized the leader. For the business sector, the bet is that the new president will carry out the campaign promise to relieve production, such as investments and payroll. Dilma said she was not in favor of more taxes, but left the doubt by citing that there is demand from the governors.

The environment that prepares the future government combines a basket of ingredients: the prickly ones - interest, foreign exchange and public debt - and the most palatable and challenging ones - a heated economy and high social indicators, alongside the vacancy market.

Dilma in the Plateau and Tarso Genro in the State. Can the political combination help Rio Grande do Sul? The expectation is that qualities such as local innovation and greater weight in exports, mainly of industrialized items, will gain more space according to the conduct of macroeconomic measures. Therefore, the State is part of the country and will benefit from incentives that reach the entire economy.

FEE's technical director, Octavio Augusto Conceição, mentions that there have been coincidences in the past. Antonio Britto here and Fernando Henrique Cardoso, of which he was minister, in Brasília, but the economic environment was at the beginning of stabilization. But the fact that Dilma has established her career on Rio Grande do Sul soil naturally gives visibility. Colleague of the president elected at FEE, when Dilma presided over the agency between 1991 and 1994, Conceição, who held the same current position at the time, points out as a characteristic of the future president of the Republic the recognition of innovations. "She always said that something tested innovatively here is on a national level," recalls the economist.

The prestige can come, for example, by the choice of names of the gaucho businessmen or of the technical area for top tiers. The president of Fiergs, Paulo Tigre, has already been mentioned. The leader smiles and deceives when the subject comes up in this sector. "There is nothing. I don't talk about it ”, cut Tigre. The current president of ApexBrasil, Alessandro Teixeira, who coordinated Dilma's program, is another strong candidate, nominated for the future Ministry of Small Business. Conceição also mentions as characteristics of the ex-colleague the profile of manager and that the promise of responsibility with public expenses is one of its marks.

* with agencies

The Brazil expected in 2011

The stones on the way

Dilma Rousseff and President Lula unite against the so-called currency war, which would be waged between major powers, today the United States and China. For ESPM professor of International Relations Christian Tudesco, the floating exchange rate policy should not change, which has already been assured. "Those who have not adapted in the past five years are experiencing more difficulties", warns the expert, warning that the period served for many companies to use imports to cheapen investments in inputs and machines and gain quality.

• The exchange rate directly impacts the efficiency of exports of industrialized items, which face greater external competition and have the weight of the so-called Brazil cost. The result is that today commodities have gained space and manufactured products retreat. The dollar, which tries to balance itself at R $ 1,70, has fallen by around 20% since December 2008, when the external crisis was more acute. The current government triggers measures such as a higher Tax on Financial Transactions (IOF) to control the external flow.

• The net public debt, which may close at almost R $ 1,8 trillion, more than 40% of GDP, is the focus of concerns. FGV economist José Armando Castelar calls into question the promise of more social investments and the possibility of spending less. According to Castelar, costs have risen twice the percentage of GDP growth since 2005. The economist mentions that the highest collection, compared to growth of 7,5% in 2010 and 4,5% in 2011, has a limited duration.

• High interest rates, less than in past years, when the Selic rate reached 40% per year, but which increase the cost of credit. The former president-director of the Movimento Brasil Competitivo (MBC) and consultant José Fernando Mattos does not believe in a further decline, since the rate ends up being an instrument to hold inflation. Reducing public spending would be the first action to resume cuts. Castelar, from FGV, recalls that changing the Selic is a way of containing currency appreciation, but the fear is of price warming.

• External competitiveness and infrastructure: the so-called Brazil cost has a strong weight of the precarious structure or higher price of transport and taxes. World Bank report (Bird) places Brazil in 129th position in competitiveness for companies, considering factors of production to bureaucracy and taxes. Business movement creates committees to encourage innovation, which occupies less than 1% of GDP investments. Consultancy studies show that in the external dispute, in sectors such as steel, after matching production efficiency (Brazil is in second place, behind China), the position falls to fifth place among the biggest players due to the tax burden. The price rises by up to 40%. The government promises to create conditions for greater innovation. Christian Tudesco mentions that the impulse to small and medium-sized companies for export begins to have a differential with the promise of creating the Ministry of Small Business, whose name quoted to preside over it is that of the gaucho Alessandro Teixeira, current president of ApexBrasil. But the International Relations specialist warns that the portfolio will have to have instruments and an active role. “In Italy, MSEs account for 75% of foreign sales”, he compares.

• The reforms: leaders and experts hope that finally tax, social security and even labor reforms will be out of the way. The president of Fiergs, Paulo Tigre, considers that the themes must be guided by the government's start in 2011.

• Exemption from taxes on foreign sales and also on investments should be one of the measures, points out Tudesco. But the vice president of the Steel Association of RS (AARS), Sergio Neumann, argues that there is no point in relieving only what is export, since the tax cost on the sheet increases prices.

The assets that help

The data from the Employment and Unemployment Surveys (PED) in the largest metropolitan regions reinforce the thesis, with an increase in vacancies with a formal contract and retreat of the contract without registration. Rising economy irrigates the gas station market, drops unemployment rates to lower levels in historical series. Income also grows, fueling consumption. For Dilma, the problem must be serving the contracting market with qualified workers. Problem already registered in several sectors.

• Employment on the rise: President Lula fills his mouth to account for the 15 million formal jobs generated in his two terms. Dilma had this statistic in her favor in the election. Dieese economist Eduardo Schneider points out that Lula's actions since 2004 contributed to structuring the vacancy market, with an impulse to formalization.

• PED study in the Metropolitan Region of Porto Alegre reveals that the deficiencies in this area are more serious in civil construction, commerce and food services.

Schneider points to a public action to improve training and greater efficiency between the offer of posts in the National Employment System (Sine) and candidates. "Greater integration of these policies generates positive synergy for the proper functioning of the market", he warns.

• Infrastructure investments: Dilma's greatest ally will be the Growth Acceleration Program (PAC). Pac 1 promises to end 2010 with an investment of R $ 620 billion. The second edition will inject R $ 1,59 trillion, which will advance beyond 2014. By the end of Dilma's term, the government plans to spend almost R $ 1 trillion focusing on the World Cup. The World Cup and the 2016 Olympics appear as the two levers added to the pre-salt of the challenges for infrastructure and also for the supply of equipment by the national industry. In the division of the cake, energy will have R $ 1,092 trillion and housing, R $ 278,2 billion, with the flagship of the Minha Casa, Minha Vida program, with a new goal of building 2 million homes. The segment already generates the boom in civil construction, which in the State experiences a 12% increase in formal employment. The construction target will still fall short of the housing deficit, projected at 5,8 million units, more than 80% in the urban area.

• Informality: Another channel to improve employment and boost the government's cash flow is to combat informality. FGV's Brazilian Institute of Ethics in Competition (Etco) calculated the flow of this sector at R $ 200 billion per year, which is measured by the Underground Economy Index. "The informal worker loses the protection of the law, the taxpayer pays more, the consumer is left with no guarantee of purchases and the good entrepreneur has an unfair competitor", sums up Etco's chief executive, economist André Montoro.

• Economic growth: the performance of the country, which should lead rates of 4% to 4,5% in the coming years and without inflationary fuel, is an unprecedented case in the history of the country, according to the technical director of FEE, Octavio Augusto Conceição. It is a legacy of the FHC and Lula governments that would be passed on and would be an asset regardless of the winning candidate, stresses Conceição. For the economist, stability was priced at low growth rates. The difference between Lula and FHC is that the PT bet on stability, but with an eye on the social. For the technical director, the actions of the future president should try to combine fiscal balance with demands in the social area. The improvement in infrastructure will also help in the overall efficiency of the activity.

• Social goals: one of the most positive balances of Lula's two terms of office - migration of the population from classes D and E to C and reduction of the contingent of poor people - will remain strong in the first years. The social goal of poverty eradication will mean more spending. Dilma has already projected that she wants to universalize Bolsa Família, which reached 12,7 million families this year, in addition to promising an increase. The minimum wage may also receive more impetus, anticipating the increase in GDP from 2010 to 2011, which would only be reflected in 2012. Proposal goes to union centrals. How to solve this equation is question number 1 for the new government, warns José Armando Castelar, from FGV. Once again it is the pressure of the public debt.

Brazil publishes six tax rules per day

Source: Legal Consultant - São Paulo / SP - 11/10/2010

In Brazil, a company that does not do business with other states in the country must strictly comply with at least 3,4 tax rules. This is approximately equivalent to following 38,4 articles or 89,5 paragraphs. Or: 286,2 thousand items. The country's companies, together, spend around R $ 42 billion a year on personnel and equipment to keep up with changes in tax legislation. The data can be found in the study Quantity of Norms Edited in Brazil: 22 years of the Federal Constitution of 1988, made by the Brazilian Institute of Tax Planning (IBPT).

The IBPT study has been carried out year after year, since the current Federal Constitution completed 15 years of existence. According to tax expert Gilberto Luiz do Amaral, one of the coordinators of the research, the hyper offer of standards creates legal uncertainty. “The abundance of legislation”, he explains, “creates insecurity in the citizen. This becomes notorious when you ask anyone if they know all the traffic laws or the rules that govern the issuance of a document ”.

In 22 years, Brazilian citizens have witnessed the issue of almost 4,2 million standards. These are determinations that regulate traffic and daily life in the condominium, for example. However, 6% of this amount relates exclusively to tax matters. In this field alone, the number of new standards is close to 250 thousand. The result is an alphabet soup. In just over two decades, taxes such as CPMF, Cofins, Cides, CIP and CSLL were created - not to mention other import taxes, such as PIS, Cofins and ISS.

Brazil currently has 62 taxes. The path to written law, however, is arduous. Of every 100 laws arising from Executive acts, 30 go through some kind of questioning in the Judiciary. “Brazil has a habit of modifying taxes. This tradition dates back to when the country was still a colony of Portugal ”, he explains. In 22 years, Brazil has had 22 tax reforms.

According to the report, Brazil has been gaining 22 tax rules per business day for 5,91 years. Most editions are concentrated in the municipalities, which hold 55% of them, or just over 137 thousand. Next come the states, with 83,5, or 33,5%. Finally, federal tax rules, which represent 11,5% of the total, or 28,5 thousand editions.

For Luiz do Amaral, the constant editions of rules do not take into account whether ordinary people are aware of this information. "There is no political interest", he says, "in facilitating access to the tax field, since it presupposes profit". Currently, more than 206,73 thousand articles, 481,68 paragraphs and 1,54 million items are in effect.

The director of the Brazilian Association of Financial Law (ABDF), Ana Claudia Utumi, is of the same opinion. She said the tax system is complex and involves a number of different taxes and unknown terms. “There are taxes from the Union, the states and the municipalities. The way in which legislation is structured is complicated. There are many gaps and lack of objectivity. That is why we have so many rules to regulate this system. ”

Paying Taxes 2008 - The Global Picture, a study by PricewaterhouseCoopers and the World Bank, shows that legislative immensity is often harmful. According to The survey, Brazil is the country that takes the longest to comply with tax obligations. The 2010 report pointed out that Brazil, among 183 countries, is the place where companies spend the most time to pay taxes: 2,6 hours per year. In India, an average of 271 hours is spent.

The constant publication of standards is a two-way street, believes lawyer Luiz Roberto Domingo, a member of the Administrative Council for Tax Appeals (Carf). “This, on the one hand, complicates the life of the lawyer, as he must always be updated, but on the other hand, it makes the tax attorney more flexible. We are already used to it. ”

It is the Complementary Law 95, of February 26, 1998, which establishes rules for the elaboration, writing, alteration and consolidation of federal legislation. According to him, the law has not been complied with.

The lawyer and professor at the University of São Paulo, Roberto Quiroga Mosquera, said that tax law has always generated a lot of legislation. “The financial market, for example, has flexible activities and many changes. So, it's easy to understand why we have so many standards. ” He pointed out, however, that what should be considered is not the quantity of standards, but the quality of them. “The government has been producing quality fiscal standards, such as the transfer pricing law and the sub-capitalization law.”

With that, agrees Luiz do Amaral. “There is no need to carry out a tax reform, as many say. We do need more rationalization to edit the rules, ”he explains. "A tip for deputies and senators: it is up to the National Congress not only to propose laws, but also to organize the national legislative system, so that the population can know and understand their rights and obligations."

Paulo de Barros Carvalho, president of the Brazilian Institute of Tax Studies (Ibet), is also in favor of rationalization. According to him, an effort can be made to simplify what already exists and to eliminate what is excess. “This effort can be carried out within the states themselves”, he explains, “because they have autonomy of action. You don't have to wait for the other one to do it ”. However, the tax official explains that he considers the constant editing of fruits as a natural process of society. “It is a natural process. The legislation needs to accompany the hypercomplexity of society's relationships. ”
2010 Minas Gerais Justice Yearbook
An unprecedented radiography of TG-MG.