The deep well

Analyzing the data from the Federal Treasury, the tax liability is already half of the country's GDP.

Edson Vismona, Article published in the newspaper O Estado de São Paulo
03/06/2020

Public authorities increase spending and look for ways to increase revenue. The taxpayer is unable to afford the size of the state, but mandatory and related expenses are growing. The budgetary margin narrows and tax creativity has been stimulated, with the introduction of new taxes and ancillary obligations, generating a tangle of laws, decrees, normative instructions that challenge the understanding of our tax system. The result of this equation is the tax burden that consumes 35% of GDP and investments, and the quality of services provided is not proportional to public spending. The account does not close.

Lawyers, lawyers and market experts point to a point that has not been discussed and is of great importance: the size of Brazil's tax litigation. In order to determine the amount of this problem, the (Etco) hired the consultancy EY to carry out a study.

The result showed that, analyzing the data from the Federal Treasury, the tax liability is half of the country's GDP (R $ 3,4 trillion). This amount grows every year and, moreover, there was an increase in tax representations for criminal purposes of 5% in one year (2017 to 2018) and the value of credits launched increased by 68% (2016 to 2017). The average process time, if linear until the last judicial instance, is 19 years and 2 months. These data demonstrate that we are in a well and that, instead of looking for a ladder to get out of this situation, we are, in fact, with a shovel deepening and increasing this liability. The tax authorities need resources and the taxpayer, the vast majority, wants to keep up with their obligations, that is, one needs to receive, the other wants to pay, but the existing mechanism does not allow a quick and effective exit. This situation, as absurd as it may seem, does not serve the Tax Authorities or the regular taxpayer, but it is great for the so-called persistent debtor, the one who structures himself to never pay taxes, and who uses all the procedural possibilities for that, and thus , greatly increase its profit margins, eroding competitiveness and harming the tax authorities by billions. The way out to reduce the long and costly litigation processes must first consider the feasibility of an agreement before or at the beginning of the assessment. The US tax authorities, for example, recognized for their rigor, adopt fast mediation and arbitration procedures. The goal is to set the amount due and receive. Secondly, the possibility of agreements that speed up the effective payment, regularizing the situation of most taxpayers, regulating, finally, articles 171 and 156, item III, must be made possible, with all legality, transparency and control. National Tax Code. Law 13.988 / 2020 indicates this direction. The estimate is that R $ 900 billion could be collected. With the payment in installments, for example, in ten years, the Federal Revenue Service would have R $ 90 billion per year, more than was predicted by the pension reform. Finally, in order to combat the action of persistent debtors, who should not be confused with occasional or even repeated debtors - they fail to pay taxes for economic difficulties, while the former never pays taxes, in fact, evasion makes up their disproportionate profit - , is that we defend the approval of PLS ​​284/17, which is at the end of the process in the Federal Senate, specifying who should be considered a regular debtor, with the exact classification by the Judiciary. In short, it is urgent that we discuss the taxpayer-taxpayer relationship, valuing those who act in good faith and punishing those who intentionally do everything to not comply with their obligations. We can no longer remain in this well that brings the financial resources of the tax authorities and taxpayers.

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