| Atvos Agroindustrial
Atvos Agroindustrial
The department is composed of three lawyers and one paralegal who are based in the company’s headquarters, and we have the support of another six lawyers located in the sugar power plants who are closer to the municipalities and states for some specific demands. Débora Gasques acts on the most strategic cases of the company, in both litigation and advisory capacities, always seeking the best results for the shareholder and internal clients. She also represents the company before several entities, such as Única (State Association of the Sugar and Alcohol Industry) and CNI (National Confederation of Industries).
Paula Werner, senior lawyer and tax coordinator, oversees the relevant cases, analyses the demands on the various operations and coordinates the relationships and partnerships with all law firms which give support to the company in different matters. She also maps out strategies and gathers evidences along with the law firms, as well as supervising the work of Lorena Terra, lawyer, who monitors audits and is responsible for the renewal of tax compliance certificates. The tax legal team is placed in the legal department under the leadership of the legal vice president (Joana Batista).
Our operations, which involve several states, municipalities and the federal government, are complex in terms of taxation, so any failure in our procedures may result into a large contingent liability. We identified a tax procedure issue that could have a huge impact on the company’s cash balance. After analysing the legislation of several states, we concluded that it was feasible to file a spontaneous confession of ancillary obligations, it is a statutory provision but still a controversial matter in courts. We rectified all operations in the states in which we work in, so no tax liability was imposed to the company.
Considering that the number of women in the agribusiness industry in Brazil is so reduced in comparison to the quantity of men – especially in positions of leadership – the company has annual gender equality initiatives in all its units, such as dialogues with men and forums with women, aiming to identify barriers so that we can move forward on the topic.
The importance of the agribusiness industry for the country became even stronger when the “RenovaBio” programme was approved as a federal public policy to recognise the strategic role of all types of clean biofuel in the Brazilian energy source. This new policy seeks to reduce greenhouse gas emissions. Considering the positive impacts of this new policy, we have been attending all possible discussion forums on the topic.
The Brazilian tax system has been criticised for not meeting all the requirements of the tax trade-off efficiency and equity, which can be summarised into five main aspects: simplicity, efficiency, neutrality, transparency and equitably.
Simplicity is related to the easy way to collect tax. We have an extremely complex system that demands many hours of work, a high cost of tax compliance and litigation. When it comes to efficiency, we must check if the collection reaches a great amount of money, which we can conclude that it does, because, if we consider the tax collection only at the federal level, we have already attained the huge annual value of close to R$1.4bn (US$341m). Neutrality is when the system does not impact decisions, which we do not observe in our tax system since several sectors are, for example, structured to reduce the tax impact.
Regarding the last two mentioned aspects and considering the fact that we cannot quantify the amount of taxes we pay in each operation, as the tax is levied on its own tax base, transparency does not apply either, and the same thing happens with equitably. Neither of them is employed and this can be noticed when there is a high taxation (income tax and social security contribution on payroll) on people who earn less than R$4,000 (US$976).
As we can see, we really need an urgent tax reform able to simplify the system, correct distortions and increase the country’s competitiveness, but at what cost?
We are facing an uncertain scenario, different tax reform proposals were put forward without an in-depth economic and social analysis of any of them. So, the question is – what is the real impact of each tax proposal for the country? Although a legal reform is a necessary step towards a more sustainable economic development, it must be taken in a responsible way so the less developed regions of the country will not be even more affected.
Brazil is a peculiar jurisdiction when it comes to the adoption of tax incentives to attempt to promote the economy of the less developed states: as opposed to the typical adoption of social development policies, we make social policy by means of the tax system, that is, through the massive use of tax benefits. Therefore, instead of implementing effective social policies aimed at developing those regions, what happens is the use of tax benefits by the states to improve the life quality through education (such as vocational courses) and infrastructure, especially sanitation and logistics, to achieve the public goals.
The tax reform that will hopefully be enacted not only needs to consider the country’s adversities and particularities. It definitely must be based on solid analyses that are able to address the fiscal impacts of every new policy and must not rely on a desired equalising process that could be – and it could not be – made by the market, as some externalities may be difficult to reverse in light of the complex economic and political scenario of
the country.