Tax criminalization
Brazilian taxpayers have been taken by surprise after their Supreme Court judged appeal on habeas corpus nº 163.334/SC and ruled that southern businessman Robson Schumacher is guilty of a felony against their tax system for not retaining values pertaining the tax on circulation of merchandise (“ICMS”) that were clearly paid by his consumers as the monetary value of the this tax was included in the final price of his goods. This particular judgement represents a significant risk simply because the thesis proposed and accepted by the court can be translated as “The taxpayer that, persistently and consciously of the fact, refuses to pay the ICMS charged from the consumer of the bought good or service incur on the conduct foreseen on clause II, article second, of federal law 8.137/1990 (Law that disposes about crimes against the tax system)”
In this case, the accused did not pay the tax persistently for over more than ten years, had several tax enforcement`s proposed against his business and himself and did not go through with several instalment plans made with the stately authorities, a absolutely specific case in which there is little to no room for sensible discussion about his true intentions. However, the way this ruling was set seems to foresee that tax authorities of all levels of the federation may exaggerate what was sensibly decided by the ministers and start issuing arrest warrants as a means of intimidating taxpayers by charging them with a supposed felony.
Currently, the understanding that tax non-payment is a typical conduct for criminal purposes is a topic heavily debated in every legal institution of the country, particularly since there are at least eleven distinct definitions of persistent debtors all over the country’s, gigantic, national territory, and while some professionals argue that this definition should be considered the total value not given to the authorities, others understand that It should consider the amount of times the taxpayer`s act accordingly to the typical conduct.
The problem with considering the absolute value effectively owed to the authorities is that bigger companies will be affected in a way that may cause them to skip Brazil entirely, after all, not only they may realize the infraction once and have their investors criminalized, but the many operational mistakes that afflict giants like Ambev or LG can lead to a sum high enough by its own.
This issue seems to be easily solved if we are to consider the relative value based around the total tax owed in a given period, but this could lead to exploitative tax plans that purposefully neglect part of their duties just enough that the educational nature os the sanction is lost. As such, this method still seems flawed and will hardly be chosen by Brazilian legislative.
In conclusion, it is likely this controversy will not be easily solved in the future and that the supreme court will choose another case to discuss what`s the precise definition of persistent tax debtor should be accordingly to the constitution, but until them, considering that the Brazilian.
