On interview with Valor Econômico newspaper, the president of Abihpec – Brazilian Association of the Personal Hygiene, Perfumery and Cosmetics Industry – João Carlos Basílio said that the tax simplification discussed in the federal government should not have an effect for the industry before it is provided the stabilization of ancillary obligations, related to the bureaucratic environment behind the payment of taxes. According to him, tax simplification is still far off.
The National Tax Code establishes the rules that govern the tax obligations of all the taxpayers of the country. In addition to the main tax liability that governs the payment of the tax itself, there is an ancillary tax surveillance that governs all other bureaucratic procedures that will serve as a basis for the payment of the tax and future supervision. Among the ancillary obligations are: Issuance of the invoice for the sale of merchandise or service; Issuance of tax collection guides; Bookkeeping of fiscal books; Preparation and submission of pertinent tax returns; Financial Statements; Payroll, checks, preparation and submission of social statements.
Brazilian companies waste a lot of time in preparing and paying taxes – the highest global level. The World Bank estimates that they are about 2,038 hours a year, while in France, for example, entrepreneurs dedicate 139 hours a year to the subject and in the United States 175 hours a year.
In 2016, Abihpec estimates that it has sent 600 associates to its members informing about changes in tax obligations and procedures for tax filings.
In the first two months of 2017, the reports issued by Abihpec exceeded 70, surpassing the same period of 2016. Failure to comply with ancillary obligations may result in significant losses for companies, through fines or temporary halting of activities.
Supported by the World Bank study, Brazilian Finance Minister Henrique Meirelles recently announced that the IRS is working on a program to reduce tax bureaucracy. Among the measures are the creation of new taxes that would be the junction of some of the main taxes.
“The project sounds like music to my ears, but how do we unify the distortions that each state promotes? It is necessary to dialogue more with the reality of the delicate situation that the country is living in a fiscal way, “João Carlos Basilio told the newspaper. “The industry needs to take a breath, absorb the tax changes of each state. For this, it is necessary to stabilize the tax payment procedures, “he evaluates.