Government project forces companies to declare tax benefits

In yet another initiative to increase revenue and pursue the goal of fiscal balance, the federal government wants to comb through all the tax benefits that reduce the Union’s tax revenues. To this end, it proposed – in an urgent bill – to require companies to declare to the Federal Revenue Service all tax reliefs or exemptions that they enjoy and prove that they meet the requirements to be entitled to the incentive.

The measure is part of a package that establishes a series of tax and customs compliance programs. The intention, according to the justification of the proposal, is to increase transparency in relation to revenue waivers, improve the management and control of benefits and the performance of the policies sought with the incentives. The government also wants to gradually reduce the overall amount of tax benefits.

“Last year, we faced the big [incentivos]the billions [de reais não arrecadados]. Now, we have to control the hundreds and the tens of millions. The number of these benefits is crazy,” explained Federal Revenue Secretary Robinson Barreirinhas at a press conference last month.

Since the beginning of his administration, the Minister of Finance, Fernando Haddad, has criticized the amount of tax spending by the Union. “We have many sectors that are too favored with rules that have been established over the decades and that have not been reviewed by no outcome control. Many have expired from an efficiency point of view and need to be revoked”, said the minister in March last year.

The following month, he said that he was preparing, with the Attorney General’s Office (AGU), the publication of a “CNPJ by CNPJ” list of companies currently benefiting from waivers and subsidies. “We are only paying R$700 billion in interest because we are paying R$600 billion in waivers. It’s that simple,” he told the newspaper “The State of S.Paulo”.

According to the IRS, there are more than 200 federal tax incentives in force, over which there is poor control. The government estimates that this year the Union will have to give up R$523 billion due to tax benefits. The amount is equivalent to around 4.6% of the Gross Domestic Product (GDP) or 20.6% of the federal revenue projection (R$2.54 trillion).

For comparison purposes, the Annual Budget Law Project (PLOA) of the year 2000 estimated the total benefits at R$ 18 billion (nominal value), which represented approximately 1.7% of GDP and 12.2% of federal revenue. , projected at R$148 billion.

“We have 4.5% of GDP [Produto Interno Bruto] of tax benefits, but who has these benefits? We are taking an obvious step, which is to see who enjoys the tax benefits in Brazil. It makes more sense, before cutting the benefit, to exclude those who are there unduly”, said Barreirinhas.

According to the secretary, the IRS does not have control over all incentives approved by Congress over the last few decades. “There are a series of laws that grant benefits, but there are other laws that prevent the benefit from being enjoyed.”

The initiative is in line with what determines Constitutional Amendment 109, promulgated in 2021 and which establishes, in its article 4, transitional rules on the reduction of tax benefits. According to the text, the amount of incentives until 2029 cannot exceed 2% of GDP.

Project rewards good payers and creates a list of persistent debtors

The opening of the “black box” of tax benefits is part of Bill (PL) 15/2024, sent to the Chamber of Deputies at the beginning of February. On two other fronts, the PL creates incentives for good payers and a register of persistent debtors.

According to the text, a program, called Sintonia, will offer discounts on the Social Contribution on Net Profit (CSLL) for companies with a good paying seal. The reduction will be 1% each year, reaching 3% after three years.

Another program, called Confia, is aimed at large companies, with annual revenue of at least R$2 billion, which can join voluntarily. Participants will have to comply with fiscal governance parameters and cooperate with the Tax Authorities. In return, they will receive a “seal of compliance” and will be able to settle their debts within 120 days without a fine or with a reduced fine.

A third incentive program is the Authorized Economic Operator (OAS), which already exists and will now be included in law. The OAS is intended to reward those who comply with customs obligations. Companies that are part of the program will receive the OAS Seal, which entitles them to priority in the release of goods and deferral in the payment of customs taxes.

“It’s as if it were consultancy that the Brazilian State is giving to taxpayers in good faith. The taxpayer, on the other hand, will have the confidence to open his heart to the IRS”, compared Barreirinhas at the press conference to present the project.

The last axis of the program foresees the tightening of rules against persistent debtors, a category that includes around a thousand companies, in a universe of 20 million legal entities, which owe the Federal Revenue systematically.

“We have taxpayers, unfortunately, whose core business is not collecting taxes. That’s what makes him money; It’s not the product he produces, it’s not the good he sells. We are talking about 0.005% of taxpayers who will be affected by this persistent debtor legislation”, said the secretary.

In justifying the proposal, the government emphasizes that the persistent debtor “is not to be confused with the recurring defaulter, much less with the taxpayer in good faith” and that, “therefore, his behavior cannot be compared with that of the majority of taxpayers” .

According to the text, there will be three criteria for a company to enter the Tax Register of Regular Debtors (CFDC):

• debt above R$15 million and worth more than the equity itself;
• active debt debt above R$15 million for more than a year;
• debt of more than R$15 million and CNPJ written off or ineligible in the last five years.

Once included in the register, the taxpayer will have a period of time to regularize their situation. If you cannot prove that the debt does not arise from a tax strategy, the taxpayer will not have the punishment extinguished, even after paying the taxes. If a crime against the tax system is proven, the persistent debtor will be criminally liable, with intent.

“If a guy comes to your house and robs you, he can’t say ‘sorry, the money is back here’, and the crime will be extinguished. The persistent debtor will not be able to do this either”, compared the secretary.