Revenue suffered interference in 4 years under Bolsonaro – 03/04/2023 – Power

Until then seen as one of the most powerful institutions in the Brazilian state, the Federal Revenue was, in the four years of Jair Bolsonaro’s (PL) government, subjected to the onslaughts of the now ex-president to benefit allies, shield family members and provide technical support to measures electoral character.

Targeted by the Planalto Palace, the body also lost its defenses against the National Congress and witnessed the realization of the historical desire of interest groups to reduce its inspection and collection power, benefiting large taxpayers in administrative judgments.

Part of these mechanisms is now being revised by the team of the Minister of Finance, Fernando Haddad (PT), under resistance from business groups and the Legislature.

The constant exaltation of records in federal revenue, voiced by Bolsonaro and his then Minister Paulo Guedes (Economy), contrasted with the feeling, among tax authorities, of scrapping and disorganization due to the lack of personnel, budget and governance in formalizing processes and taking of decision.

The act to expand the tax exemption for pastors and religious leaders, edited in August 2022 by the then special secretary of the Revenue, Julio Cesar Vieira Gomes, was one of the episodes pointed out by technicians and even by people linked to command posts during the Bolsonaro administration. as part of a list of organ attacks.

wanted by Sheetthe former secretary disagrees with this assessment and argues that exemptions and amnesties for religious entities were instituted in successive changes in legislation that occurred since 2000. “The interpretation rules seek to facilitate the application of the law, which helps to prevent and reduce litigation , constant effort in our management”, he says.

He says that, as a technical body, “composed of a professional and committed staff, the Federal Revenue operates with autonomy”.

In response by email, still in 2022, the Revenue’s press office provided data showing the drop in the number of public servants, the cut in the institution’s budget and the reduction in the number of inspections targeting public agents. The agency stated that “it has always sought to improve its work processes”. Sought again this year, the institution declined to comment further.

By dealing with sensitive information from taxpayers, the Revenue has been the center of accusations of political interference in the past. In the previous administration of Luiz Inácio Lula da Silva (PT), for example, the then Minister of Civil Affairs Dilma Rousseff was accused by the agency’s secretary Lina Vieira of asking to lighten an investigation involving the Sarney family. Vieira left office, and Dilma denied the accusation.

In the Bolsonaro government, interference gained scale in the assessment of the technicians themselves, heard by the report under the condition of anonymity.

One of the few episodes in which the civil servants managed to stop the pressure was revealed by the newspaper O Estado de S. Paulo this Friday (3): agents of the organ seized in Guarulhos (SP) jewelry worth R$ 16.5 million that would have been presented by the government of Saudi Arabia to former first lady Michelle Bolsonaro and brought illegally to the country. Despite attempts, Bolsonaro was unable to retrieve the valuable items.

The past government’s attacks against the Revenue began in 2019, when the then special secretary of the body, Marcos Cintra, came under pressure to “solve the problem” of the churches. Entities commanded by pastors allied with Bolsonaro accumulated billions of debts, due to inspections that aimed at paying bonuses to pastors without due collection of taxes.

In addition to not having complied with the Planalto order, Cintra was in favor of a tax on financial transactions, along the lines of the former CPMF, which would even be levied on church tithes, as the then secretary reported to the Sheet in April 2019. The statement had a bad effect on supporters of the then president and contributed to Cintra’s resignation months later.

The pressure in favor of the churches continued under the management of José Barroso Tostes Neto, who took office afterwards. He was even summoned by Bolsonaro to a meeting on the subject at Planalto in April 2020.

In the meeting, unusual in the routine of a technical body, Tostes heard from parliamentarians linked to the churches accusations of unequal treatment and persecution. He defended the collection and said that the churches’ tax immunity included taxes, but not social security contributions.

It was during Tostes’ management that Bolsonaro also began to pressure the Revenue Service to cooperate in the mission to free Senator Flávio Bolsonaro (PL-RJ), son of the former president, from an investigation into suspected cracks in his cabinet when he was still a state deputy for the Rio de Janeiro.

Flávio filed an official request for the agency to investigate any illegality in accessing and sending his tax data to Coaf, the federal intelligence agency that prepared the report that led to the investigations.

The investigation mobilized five civil servants for four months. No irregularities were found, but the clash exposed interference in the body and left a trail of dismissals: first, the then Internal Revenue inspector, José Pereira de Barros Neto; then, Tostes himself, who resisted appointing an ally of Flávio to head the Corregedoria.

Between December 2021 and the end of the previous government, the Revenue was commanded by Julio Cesar Vieira Gomes. His title of tax auditor gave the nomination a technical gloss, but behind the scenes his proximity to Flávio and the former president was known.

After taking office, Gomes appointed auditor João José Tafner, a Bolsonaro family sympathizer, to head the Corregedoria —a key body for Flávio’s defense. How did he reveal Sheet this week, Tafner, whose mandate runs until January 2025, now accuses Gomes of having pressured him to acquit a civil servant who, as head of the agency’s intelligence, unmotivatedly accessed confidential tax data from Bolsonaro’s enemies. The former secretary denies this.

Gomes was also the one who carried out the Planalto command to put an end to the collection of church debts, expanding the scope of exemptions through an administrative act. In the assessment of technicians heard by the report, the content of the document buried for good the interpretations of the auditors who still supported the continuity of the collections.

“All ADIs [Atos Declaratórios Interpretativos] edited resulted from this need [de facilitar a] application of the law and did not innovate in the legal system”, says the former secretary.

One of the people heard privately says that the Revenue was “tamed” in the years of the Bolsonaro government, with internal persecution of anyone who went against the political interests of the former president and his allies.

The number of inspections targeting public officials (including politicians, judges, ministers and the military) dropped from 378 in 2019 to 213 in 2021 — a drop of 43%. In 2014, at the height of Operation Lava Jato, these calculations reached a peak of 728. In the following periods, they remained at an average of 395 per year.

According to the Revenue, the work process of the special group that oversees public agents underwent “internal reformulation”, triggered “due to a decision by the STF (Federal Supreme Court)”.

In early 2019, the STF suspended a tax investigation against 133 taxpayers, after the disclosure that minister Gilmar Mendes and his wife, lawyer Guiomar Feitosa Mendes, were among the targets. The magistrate accused the body of “abuse of power”. The Revenue already said at the time that the calculation was preliminary. Afterwards, the Tax Authorities argued that the court decision “did not impact the results achieved in the inspection of this segment”.

Interlocution between technical staff and the agency’s command also deteriorated during the Bolsonaro government, according to people consulted by the report. Cintra faced resistance from outside, but was considered a “good listener” to technical considerations.

In Tostes’ management, even though he was a retired tax auditor, friction increased. He even became the target of a “no confidence motion” approved by the category. Under Gomes, dissatisfaction was growing with the determinations that arrived ready, without room for argument.

The Revenue was also criticized by control bodies for the degree of informality in its decision-making process. An audit at the CGU (Controladoria-Geral da União) found that the Treasury, as well as other areas in the Ministry of Economy of Guedes, did not document the steps taken in the preparation of measures as it should. This weakens control and transparency by making it difficult to identify who made a certain decision.

Technicians recognize that the problem is not exclusive to the Bolsonaro government, but has grown in recent years, especially with the consultations and requests that arrived under the seal of urgency —including to enable tax cuts used by the former president to please his base of supporters and appease public criticism.

The trampling in the procedure took place at a time when the technicians were already accusing the scrapping of the Revenue structure. Between 2017 and 2022, the number of active auditors dropped from 9,515 to 7,622 (19.9% ​​reduction). The budget for funding and investments has shrunk.

“It’s a dismantling situation”, says tax auditor Isac Falcão, president of the National Sindifisco (Union of Federal Revenue Tax Auditors). According to him, the cuts reduce the possibilities for inspection and collection activities, suffocating the agency.

The Revenue still suffered a relevant defeat in Congress, which for years had tried, without success, to extinguish the so-called casting vote in the Carf (Administrative Council of Tax Appeals) — the administrative court that judges tax conflicts.

The casting vote ensured that the Revenue would maintain the collection in the event of a tie, something that could happen in a court formed by representatives of the Tax Authorities and taxpayers.

With no line of defense in the Legislature, the body lost the casting vote in 2020, benefiting taxpayers and impacting the accounts. “It created an unusual situation, hitherto unprecedented in world tax law: taxpayer representatives giving the last word, in an administrative court, on tax assessments perpetrated by the agency responsible for inspection”, criticized the Revenue.

In January, Lula and Haddad issued an MP (Provisional Measure) to reinstate the casting vote. The measure, praised by tax auditors, faced resistance from taxpayers, who managed to extract an agreement from the government to reduce fines and interest on collections. In Congress, where the measure will need to be approved to be converted into law, there are also obstacles.