Association criticizes return of casting vote at Carf – 02/27/2023 – Panel

Abrasca (Brazilian Association of Listed Companies) issued a note this Monday (27th) criticizing the return of the casting vote by Carf (Administrative Council of Financial Resources), which would be a “true setback” with the potential to generate “procedural slowness, instability and unpredictability to administrative judgments”.

The association argues that the measure will increase resources to the Judiciary, which will ultimately be funded by taxpayers. The entity mentions the so-called loss of suit fees, percentages paid to Union lawyers for overdue lawsuits.

In the assessment of the entity, the return of the rule is contrary to the understanding of the STF (Federal Supreme Court). The note cites an assessment by Minister Alexandre de Moraes, who in ADIs (Direct Actions of Unconstitutionality) 6,399, 6,403 and 6,415 claims that the tiebreaker in favor of the taxpayer seems more reasonable, “because the Constitution provides for a whole regulatory framework of protection” to him.

Another data that the entity highlights is the low percentage of decisions defined by the tie-breaking vote, which would make the expectation of raising revenue by up to R$ 60 billion unrealistic.

According to the data presented, in 2020 only 0.4% of the analyzed appeals had a tie resolved in favor of the taxpayer. In 2021 it was 1.6% of decisions and in 2022, 1.9% of cases.

“The measure inaugurated in April 2020 represented a healthy change for the tax environment, having drawn attention to the need to seek non-litigious means for resolving disputes, their prevention and the possibility of self-regulation by taxpayers”, argues Abrasca.

Another criticism made is the assumption that the casting vote will always be in favor of the Treasury, which would reveal an assumption of partiality on the part of these directors.

“In addition to being inappropriate and disproportionate, the means chosen to increase the Union’s revenue represents a deviation from purpose and presumes, unduly, the partiality of the councilors representing the tax authorities, whose tie-breaking votes, in this logic, should always benefit the Union, regardless of the issues of fact and merit involved in the case.”

Abrasca makes itself available to build, with the Ministry of Finance, better solutions for Carf, which involve evaluating its productivity and ways to strengthen it.

The resumption of the casting vote, via a provisional measure, was one of the first actions announced by the Minister of Finance, Fernando Haddad (PT).

After a negative reaction from businessmen, the government negotiated an agreement with the OAB (Ordem dos Advogados do Brasil) to avoid a defeat in the vote on the MP by Congress.

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