Narración, historias de vida y discapacidad

The launch last year of “Paying Taxes – The Global Picture 2008” had wide repercussions in Brazil. Major local newspapers published articles stressing the results of the research, especially those regarding the time spent by the Brazilian taxpayer on compliance with ancillary obligations. A high level of coverage was also evident on the national television networks. Several open and cable channels commented on the research specifically discussing the high volume of hours required for compliance when compared with other countries, especially the BRIC countries.

The study reveals, in numbers, the structural problems that affect the Brazilian tax system, such as: (i) the existence of many taxes levied on the same basis; (ii) the amount of indirect taxes, charged on consumption, which are imposed by different levels of tax authorities, at rates set by several laws, and which are subject to constant modifications; (iii) the cumulative regime, which does not permit the offsetting of taxes, paid in each step of the supply chain of goods and services, against the taxes levied on the subsequent stage; (iv) difficulties for recovering tax credits accumulated by exporters, thus, resulting in a hidden taxation on export operations; (v) fiscal competition among States, through the creation of unilateral benefits in order to attract investment to the respective jurisdiction; (vi) high taxation on payroll.

All of the above topics have come to the attention of the Ministry of Finance, which has formally acknowledged that such aspects are responsible for the high cost of Brazilian investments and exportations, as well as contributing to the

bureaucracy faced by companies for the computation and payment of taxes.

As a consequence, the Federal Government has presented a new tax reform model, to be discussed at the National Congress, with the objective of simplifying the tax system and reducing the tax burden. In

general terms, the government’s proposal suggests: (i) the unification of three contributions levied on revenue through the creation of a single federal non cumulative tax on operations with goods and services (Federal‑VAT); (ii) the consolidation of the two taxes levied on profits into a single tax; (iii) the creation of a new VAT, levied by the States (State‑VAT), subject to a single taxation regime, under unified legislation, and (iv) alterations to the tax burden on payroll.

Such governmental initiatives are most welcome, opening the debate with society as a whole to address the need for tax reform, using a simplified model of the tax system as a starting point for discussion. The current expectation is that politicians, business executives, and society as a whole, will engage and work towards this objective. This is an important path for Brazil towards accelerating the country’s economic growth and improving productivity in the international scenario.

Figure 2.23 shows that just over 25 percent of economies in the study use electronic filing for all of their sales taxes and that with the Paying Taxes methodology the number approximates to one. A little under 75 percent do not have electronic filing and on average they require 10.6 payments.

Figure 2.23

Countries with and without electronic filing – how the average number of tax payments for sales taxes varies

Note: Does not include India as not all sales taxes have electronic filing Source: Doing Business database

Countries without electronic filing Countries with electronic filing 10.6 Figure 2.22

African Union – sales tax payments as a proportion of the total number of payments

% of total payments Source: database Seychelles Equatorial Guinea Uganda Mali Zambia Gabon Côte d’lvoir e São T omé Angola

Central African Rep.

Rwanda Lesotho

Mauritius Sudan

Congo Dem Rep.

Benin _{Nigeria Guinea}

Congo, Rep. Camer

oon

Cape V erde

Tanzania Ghana Comor

os Eritrea

South Africa Burkina Faso

Liberia Guinea ‑ Bissau Mozambique Madagascar Marshall Islands Kenya Egypt Togo

Zimbabwe Algeria Ethiopia Malawi

Namibia _Senegal Chad Niger Djibouti Burundi Tunisia

Mauritania

Sierra Leone Gambia

Swaziland Botswana

All other tax payments Sales tax payments 100% 80% 60% 40% 20% 0%

Figure 2.24

Distribution of total hours to comply

Number of economies

Hours to comply

Distribution of TTR

Number of economies

TTR

Distribution of tax payments

Number of economies

Full recognition for the effort being put into reform The Paying Taxes results rank each economy on each indicator and these are combined to produce an overall ranking. Where reforms are made to a tax system, there is the potential for an improved ranking. However, in understanding the extent of the movement in the ranking, it is important to understand where the economy is situated in the distribution of the rankings.

Figure 2.24 shows that for each of the indicators, there is a ‘clustering’ of results with a large number of economies falling within a certain banding . For these economies, a small improvement in their results can result in a large movement up the rankings. For economies in a more sparsely populated part of the distribution, large improvements may result in moving only one or two places up the rankings. This was highlighted in the context of France and Ukraine earlier in this Chapter. The distribution curves for each of the indicators are shown in Figure 2.24.

Some good examples of the phenomenon are as follows. The chart for the distribution of total hours to comply shows that the number of hours needed to comply with all taxes in the tax system are clustered around the 50 to 350 hours mark. There are 134 economies recording the number of hours to comply in this cluster. For China this year the time to comply ranking has only moved 7 places from 167th _{to 160}th despite a 368 hour reduction in the number of hours to comply from 872 to 504. However Ghana, which has also implemented significant reforms and reduced its hours by 80, has achieved an improved ranking of 83, 34 places higher than in the previous year.

51‑100 ₂₅₁‑300 ₄₅₁‑500 951‑1,000 151‑200 351‑400 551‑600 851‑900 0‑50 401‑450 201‑250 601‑650 901‑950 101‑150 301‑350 501‑550 701‑750 801‑850 >1,001 30 25 20 15 10 5 0 6‑10 ₂₆‑30 ₄₆‑50 ₆₆‑70 96‑100 16‑20 36‑40 56‑60 76‑80 86‑90 0‑5 41‑45 21‑25 61‑65 91‑95 11‑15 31‑35 51‑55 71‑75 81‑85 >100 30 25 20 15 10 5 0 30 25 20 15 10 5 0

Pakistan – the Paying Taxes Study reflects the structural problems in the