Simplifying the tax system to promote the country's sustainable growth

* By Edson Pinto, lawyer author of the book “O Turbilhão Tributário Crushing the Company and Society”

 
Simplifying the tax collection system to a single collection guide and channeling taxpayers' obligations to a single institution that would pass on the amounts to the federal, state and municipal governments would be feasible and practical measures that would guarantee the receipt at once, making life easier for taxpayers and also for the government. Simples Nacional, aimed at micro and small companies, allows the collection of several taxes (IRPJ, CSLL, PIS / Pasep, Cofins, IPI, ICMS, ISS and the CSS referring to Social Security in charge of the legal entity) in a single guide . It is an interesting model to be followed. Another example is the VAT - Value Added Tax - European example that is applied in each stage of the production chain, but has no cascade effect, as it happens in Brazil.
 
Discussions have already been opened for a possible unification of the PIS and Cofins, on a non-cumulative basis. There are also debates about the alignment and reduction of ICMS rates, which have rates of 7%, 12% and 18%, depending on the state of origin and destination of the products, leading to the high cost of the operation and hampering the process of the production chain. However, these themes do not advance effectively.
 
This “fiscal war” between the states in order to attract companies to their region generates this whole discrepant situation. Municipalities do the same and have different ISS rates to obtain new investments. But these measures end up creating a series of problems and hinder the growth of the economy in a sustainable and viable way.
 
There is no use in sporadic measures, such as the reduction of IPI for some products for a certain period or the withdrawal of the collection of PIS and Cofins on the foods that make up the basic basket or the reduction of the IOF (Tax on Financial Operations) for financing for people physical effects that take effect for a period, as they do not solve the problem. Only a definitive reduction will generate better conditions for the increase of internal consumption, since the products will reach more accessible levels and, with this, will promote the expansion of job opportunities in a consistent manner.
 
Another important point about tax simplification is that dozens of federal taxes are similar and can be grouped into a single payment. As long as there is no more balanced equation on the tax issue, we will continue with this tangle of taxes that hinder sustainable development. Only with the end of bureaucracies and tax cuts will it be possible to create better conditions, well-being and economic growth.  
 
* Edson Pinto is a lawyer specialized in Tax Law and Corporate Law, with 32 years of experience as a consultant in national and multinational companies and author of the book “The Tax Swirl Crushing the Company and Society” and is about to launch another title on the levy of taxes in Brazil “Tax Mafia in Brazil”.