How Nota Fiscal Paulista enforces Brazilian Tax policy
Brazil is also known for charging a high tax burden from its citizens and companies. This article will explain you how Nota Fiscal Paulista increased the tax revenue in São Paulo.
It is said that Brazilian people work four months a year only to pay their taxes.
As a consequence of such high burden, the government ends up dealing with tax evasion, an act performed not only by private people, but also by legal entities. Many measures were created in order to supervise people who refuse to pay their taxes, but a major concern was ICMS, a tax charged over goods and services.
How to make companies pay the ICMS?
As an attempt to solve the ICMS tax evasion problem, in 2007 the government of São Paulo state created the Nota Fiscal Paulista, a program that encourages costumers to demand that the companies pay their ICMS.
The question is: why these people who never seemed to care if the companies were paying their taxes or not would be willing to help the government decrease tax evasion? The answer is very simple: they would get paid for it.
The government refund the consumer 30% of the ICMS collected from the companies. And to make it more attractive, the costumers would also be competing for many prizes in cash. All they have to do is to present their CPF and demand the tax document when acquiring purchasing a product or a service.
Nota Fiscal Eletrônica: A benefits for companies
The benefits offered by the Nota Fiscal Paulista program are not limited to private people. The nature of ICMS refunds for business to business transactions give companies an incentive for to request an invoice, to make sure the correct amounts are reported to the government an electronic version of the document named Nota Fiscal Eletrônica was created.
The system allow companies to exchange invoices without dealing with physical paper invoices. Companies are offered several benefits by requesting Nota Fiscal Eletrônica:
- The companies no longer have to type invoices, once the system can be adapted to export digital information from the received document, avoiding the need of hiring someone exclusively for this task and also reducing the chances of having typo
- Reduction of the printing costs
- Incentive to e-commerce practices and to the usage of new technologies
- Reduction of storage costs, once the documents would be stored in digital files
As shown above, the Nota Fiscal Eletrônica offers a significant advantage for those who want to save time and, therefore, facilitate their daily transactions.
What has been the response to the program?
In 2009, the government has collected an extra R$ 1,5 billion from the ICMS and this amount is the profit, summed up after every prize was delivered and every costumer has received his/hers part, which corresponds to 30% of the ICMS they have paid in every purchase of commodities or services.