Tax Reform: fined by Ibama received exemption – 09/16/2023 – Market

Tax incentives granted by the federal government benefited 1,112 companies that were fined by Ibama (Brazilian Institute of Natural and Renewable Resources) over ten years.

Crossing made by Sheet with data from the Federal Revenue Service and the environmental institute shows that these companies received at least R$84.2 billion in exemption from various taxes in 2021 — the most recent information available. Since 2012, this group has been fined at least R$2 billion by Ibama.

Among the companies fined by Ibama and which received tax incentives from the federal government, the most benefited are Petrobras and Vale.

The incentives include programs such as Prouni, Sudam and Pronac, for example, in addition to benefits in devices that could be extinguished by the Tax Reform under discussion in Congress —IPI, PIS and Cofins.

Although tax incentive data refers to a single year, these benefits are renewable, and companies can receive them for longer. They are granted based on at least 11 federal government programs.

Much of the benefits are given in Income Tax. Among them are initiatives for companies to grant six months of maternity leave (two additional months), provide food vouchers, contribute to funds for the elderly and children and invest in sports development and professionalization projects.

The companies benefited from PIS and Cofins exemptions because they imported goods favored by special regimes or different laws that exempt specific items, such as seeds, fertilizers, parts for boats, among other exemptions.

There are also exemptions relating to Reidi (Special Incentive Regime for Infrastructure Development Projects). The company that joins the program is exempt from paying taxes on imports, sales, rentals and services for projects in the port, basic sanitation, irrigation and energy sectors.

In the survey carried out by Sheet, the value of fines considers the amounts indicated in infraction notices. The cross-reference includes the punishments that were paid and cases in which the defendant company filed an appeal. Sentences that were annulled or in which the alleged offender won the case in court, for example, were left out.

The number of companies fined could be even higher, since part of the data is not available for consultation. When contacted, Ibama did not explain why there is information that does not appear on the institute’s portal.

Data analysis shows that 383 companies received at least R$383 million in fines from Ibama and had deductions of R$12 billion just when paying PIS and Cofins.

If the Tax Reform, which has already passed through the Chamber, is enacted by Congress, these taxes will be transformed into the CBS (Contribution on Goods and Services) from 2027.

The IPI, whose exemption also benefited companies fined by Ibama, will become a selective tax. The PEC of the reform provides that it will affect companies that pollute the environment, but does not define that they cannot receive exemptions.

The ICMS and ISS, in which companies also have benefits, should become the IBS (Goods and Services Tax), which will be managed by the states.

The new tax system being discussed in Congress includes environmental impact among its principles, but does not detail how taxes will be levied or will not be levied on companies that deforest and pollute.

Some government bodies already apply mechanisms that veto or reduce benefits for companies that, for example, respond to lawsuits for illegal deforestation.

In recent months, banks such as BNDES have been creating mechanisms to prevent benefits, such as credits, for companies that respond to lawsuits for illegal deforestation.

The bank has already blocked 182 requests for credit for rural properties suspected of deforestation from February to June this year.

In the case of Petrobras, which is among the most benefited, there were R$29.5 billion in exemptions in 2021 alone. The oil company leads the ranking of the most fined, with R$415 million in fines.

There have been more than 2,000 fines in the last ten years, almost all for problems related to the Brazilian coast — for example, small oil spills or water disposal in violation of legislation, according to Ibama documents.

The data only considers the state-owned company’s headquarters. The values ​​can be even higher if subsidiaries are taken into account.

Vale, responsible for the Brumadinho and Mariana dams, which failed in Minas Gerais, received R$19.2 billion in tax incentives in 2021 and, since 2012, has accumulated R$1.5 million in fines. The Ibama system does not include fines for the tragedies at the two dams.

However, a fine has been issued for environmental damage in the Carajás forest region (PA).

At the intersection, there are also energy, automotive vehicle, electronics and agribusiness companies. Among them is Syngenta, which operates in the seeds and pesticides sector.

In May, the UOL revealed that the company had created an internal system to circumvent inspection by Ibama and also by Anvisa (National Health Surveillance Agency).

The company received R$1.3 billion in tax incentives in 2021, approximately the same amount it accumulated in fines from Ibama in the last ten years — almost all of them for failure to present environmental reports on its activities.

The list also includes car manufacturers Volvo and Mercedes-Benz do Brasil, which manufacture trucks and bus chassis; Caterpillar, which operates in the tractor sector; and LG, an electronics manufacturer.

Two Eletrobras subsidiaries are also at the top: Eletronorte, which operates in the Amazonas region, and Hidrelétrica do Rio São Francisco, which explores one of the main rivers in the Northeast.

Combined, the two received more than R$2 billion in tax benefits in 2021 and more than R$40 million in fines from Ibama.

Wanted by Sheet, Syngenta stated that it is committed “to conducting business in accordance with the highest standards of integrity and responsibility.”

The company reported that the inspection carried out by Ibama took place at the Paulínia (SP) factory and identified a flaw in the production process of specific batches of three products.

“After the regular conciliation procedure proposed and approved by Ibama itself, in accordance with the relevant legislation, the company paid the agreed amounts in 2022.”

He also claims that he is unaware of the value of tax exemptions and reinforces that the issue has no relation to the payment of fines, as there are no provisions in the legislation that allow taxpayers to recover taxes on the payment of fines.

Mercedes-Benz do Brasil states that it “has always adequately handled its environmental issues with Ibama”.

Volvo said it paid all the fines it has with Ibama. “Respect for the environment is one of the fundamental values ​​of our brand, alongside safety and quality. Regarding tax benefits, Volvo only uses those provided for by law and available to any taxpayer, in compliance with the conditions established by legislation”, said the company, in a note.

Vale stated that the tax incentives received in 2022 are R$1.4 billion, much lower than that reported by the Revenue for the year 2021, and listed a series of actions carried out in favor of the environment.

“Vale’s premise is to contribute to socioeconomic development and establish relationships of respect and trust in the territories in which it is present,” he said in a statement. “[A empresa] reaffirms its commitment to transparency and sustainable mining, promoting socioeconomic development and conservation of the areas in which it operates.”

Petrobras did not comment and the other companies mentioned were contacted by the report, but did not comment.

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BENEFITS

R$ 84.2 billion
This is the value of tax benefits received by assessed companies in 2021

1,112
Companies benefiting from tax incentives have been fined by Ibama since 2012

R$ 2 billion
This is the total value of the fines to these companies

Petrobras and Vale
Lead the ranking of benefits for fined companies

R$ 29.5 billion
This is what the oil company received in incentives during 2021

R$ 19.2 billion
This is the total with which the mining company was awarded