Fiscal distortions increase the burden on the state, and the burden falls on ordinary citizens

The federal government collected more than R$2.3 trillion in taxes in 2023, the second-highest (corrected) amount in history. The STF ordered the restitution of almost 15% of this sum: 300 billion reais in the case of the so-called “thesis of the century”, which provided for the exclusion of the ICMS from the calculation base of the PIS and Cofins. It also decided that the reimbursement will take place with Selic interest, without IRPJ and CSLL. Consumers, who have paid these PIS and Cofins in the price of the goods and services purchased, receive nothing; The amounts and interest, exempt from IRPJ and CSLL, remain with the companies (and their lawyers). Which is neither fair nor ethical.

Another distortion is the frequency of improper charges and the return of amounts that should never have been debited from federal, state and municipal revenues. Those who can hire lawyers to defend themselves and receive their resources back, after a short time, with unnecessary costs. The others are damaged. It is the consumers who pay, through taxes, the salaries and benefits of the Courts, one of the most expensive in the world, and of the Treasury Prosecutors, who often accept and support the accusations, even if they are clearly illegal or at least dubious, generating costs and waiting time. All this increases the burden of the State on society, in particular on the working classes, who, in addition to not being able to escape taxes, do not receive them even when unduly charged. Those who turn to the Judiciary experience delays resulting from excessive litigation, many of whom discuss the aforementioned charges or refunds.

Distortions occur at all three levels of government. In São Paulo, for example, there are hundreds or thousands of actions to force the Municipality to stop charging and return the transport vouchers it has overcharged to companies, demanding a higher price than that set for the consumer.

Wouldn’t it be a matter of holding civilly responsible, at the very least, the authorities who insist on issuing visibly irregular taxes or persist in collecting them? How much do the Union, States and Municipalities spend just to defend themselves in the tens of thousands of legal cases on every topic? And we add to this the interest for the time that passes, the fees of the company’s or consumer’s lawyers, etc.

The onus is on the common citizen. For the authorities, this is a way to justify hiring more employees, asking for additional employees and temporarily increasing their cash flow, either to carry out work or provide services, or through corruption. It is up to the next elected official to foot the bill.