Brazilian companies spend many hours every year to honor all ancillary obligations. Even so, the decades-long search for an optimized tax system has prevented the country from at least reaching a model that does not represent an economic obstacle – which would be possible with infraconstitutional measures of tax simplification. Brazil’s difficulty in advancing in this modernization process is a fundamental factor in understanding the complexity involved in undertaking in a business environment tied to low international competitiveness.
These are the reflections that emerged in the debate promoted by Canal UM BRASIL – organized by the Federation of Trade in Goods, Services and Tourism of the State of São Paulo (FecomercioSP) –, in partnership with the Mackenzie Center for Economic Freedom (CMLE). The meeting brought together Vladimir Maciel, coordinator of the CMLE, and Rogério Caiuby, executive advisor of the Competitive Brazil Movement (MBC).
In the chat, Maciel emphasizes that it is important to go beyond the discussion of reducing the tax burden, which, despite being an important factor, when treated in isolation in the public debate, prevents a concrete advance of the reforms.
“The ‘load’ factor is very important, but if we only focus on this aspect, the discussion ‘stalls’. We have been debating a Tax Reform for more than 20 years, so that simplification is more viable. If we look at the Nordic countries – a benchmark in social welfare, competitiveness and economic freedom – we will see that they all have a high burden, high economic efficiency and very low complexity. This is the point”, emphasizes the coordinator.
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In Maciel’s opinion, the mobilization for the improvement of the system should come from the government, leading the reform through simplification. “That would push the agenda and help us reach a consensus [com governadores e prefeitos] . You have to work with the good and the simple, because the big mistake is trying to make the perfect reform, because it doesn’t exist”, he points out.
Caiuby, in turn, comments on a study carried out about four years ago by the MBC with the Ministry of Economy that aimed to understand the Brazil Cost – expenses that are “outdoors” of companies and that make the business environment difficult. . The executive considers that, compared to the conditions prevailing in the Organization for Economic Cooperation and Development (OECD) countries, the Brazilian productive sector spends R$ 1.5 trillion more to do business.
“This represents 20% of GDP [Produto Interno Bruto] per year, wasted thanks to the complexity imposed on the country’s production environment. The sector spends, on average, 1,500 to 1,600 hours a year to honor all taxes. By comparison, OECD countries spend 160 hours a year. This is the ‘Brazil Cost’, in a tangible way. The resources, which are being spent on huge structures in the companies, could be converted into lower prices and more jobs”, says Caiuby.