Tax Free Day: DF shopkeepers take taxes on products and services this Thursday (2); discounts are on average 40% | Federal District

The National Confederation of Shopkeepers (CNDL) and the Young Shopkeepers Chamber (CDL Jovem) promote, this Thursday (2)O Tax Free Day. The protest, against the high tax burden in the country, will allow the population to have access to products and services, in selected storeswhich will be sold without adding taxes to the final purchase price (see below which are the stores).

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According to Raphael Paganini, national coordinator of CDL Jovem, the value of taxes represents, on average, 40% of the final price of products and services at national level. For him, the high tax burden is harmful for both entrepreneurs and consumers.

“It is past time to have some debureaucratization of the tax system. [Como está hoje] it takes away the competitiveness of companies and harms consumption. We also don’t feel the return on State services”, says Paganini.

According to São Paulo Commercial Association tax meterthe Federal District collected more than BRL 75 billion in taxes, between January 1st and this Wednesday (1st). The amount represents 6.67% of the total collection in Brazil.

  • check out here are the numbers of the tax meter

Which stores are participating?

The protest has been taking place for 16 years and, in 2022, it has the return of retail. The objective of the initiative, according to the organizers, is for the consumer to realize how much of the final value of a product is made up of taxes.

Deducted taxes are paid by entrepreneurs during the action. In the Federal District, 24 stores joined the protest, in Asa Sul, in the Southwest, in Taguatinga, in Ceilândia and in Águas Claras. According to CDL, even if the average discounts are 40%, they can reach 70% of the total paid on the product.

  • Look here is the complete list of establishments who participate in the Tax Free Day

Check out the taxation of some products, according to the Brazilian Institute of Planning and Taxation (IBPT):

  • Liquor: 81.87%
  • Imported perfumes: 78.99%
  • Gasoline: 61.95%
  • Refrigerator: 46.21%
  • Cell phone: 39.80%
  • Medicines: 33.87%
  • Vehicle 1.0: 33.81%
  • Construction material: 32.80%
  • Lunch at restaurant: 32.31%
  • Meat: 29%

Brazilian tax burden

Brazil has one of the highest tax burdens in the world (see details below). Thiago Sorrentino, professor of Tax Law at Ibmec Brasília, explains that the scenario is the result of two factors.

“The first is a very expensive and very inefficient state machine to fund. It is necessary to pay a very high salary sheet, in addition to the costs of funding and investment. All the time you have to reinforce the cash for that”, says Sorrentino.

The professor explains that the second factor that interferes with the high tax burden is the fact that some taxes are levied on others, increasing the final value of products and services. “It’s a fiscal illusion”, he defines.

For him, a tax reform is needed for a “rational and transparent system” in which people can understand what is actually being charged.

“Also [é necessário] create a mechanism to link the increase in tribute to the return of these values ​​to society, especially for those who need it most”, completes Sorrentino.

Brazilians needed to work, on average, 149 days to pay taxes in 2021 — Photo: Mikhail Nilov/Pexels

According to the Brazilian Institute of Planning and Taxation (IBPT), the taxpayer worked, on average, until May 29 to pay only federal, state and municipal taxes. It took 149 working days to pay the invoice for 63 taxes, fees and contributions.

The taxes are on products and services: PIS, Cofins, ICMS, ISS; in salaries, with INSS and Income Tax; and also affect the patrimony, for those who have, for example, a vehicle or property.

According to the IBPT study, the amount paid in taxes represents 40.82% of the average Brazilian income, which, last year, was slightly above BRL 2.7 thousandaccording to IBGE data.

Check out the ranking of countries with high tax burdens, according to the IBPT and data from the Organization for Economic Cooperation and Development (OECD) for 2021:

  1. Denmark: 179 working days to pay taxes;
  2. Belgium: 171 days;
  3. France: 163 days;
  4. Finland: 159 days;
  5. Norway: 159 days;
  6. Austria: 158 days;
  7. Sweden: 156 days;
  8. Italy: 156 days;
  9. Brazil: 149 days;
  10. Germany: 148 days.

The high amount paid by Brazilians in taxes, however, is not satisfactorily returned to the population. According to the IBPT Society’s Return to Welfare Index, Brazil has the worst return in terms of quality public services.

The 2020 survey considers the 30 countries with the highest tax burden and makes a calculation considering the values ​​of taxes and the Human Development Index (HDI). For Thiago Sorrentino, professor of Tax Law at Ibmec Brasília, the scenario is the result of the imbalance of the public machine.

“A lot of money is spent on the payroll and little is left to invest in infrastructure”, says the professor.

According to him, when the investment is made, it is lost to corruption or inefficiency.. “We see news of purchases of medicines close to expiration or of very expensive machines that cannot be installed because there is no technician. In the world, it is a unique situation”, exemplifies the professor.

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