Retail Pricing in Brazil
Unlike the USA, retail prices in Brazil include all taxes. In this article you will understand why Brazilians complain about the country tax regime, why high taxes are not so positive to Brazil population and what is the new legislation approved by the government.
In Brazil all taxes are charged upon the retail prices. This fact, added to the lack of information among the consumers about the values of the taxes charged, led the Brazilian population to demand the statement of the total value of taxes charged in the receipt.
High Taxes and Bad Government Services
Due to this obligation, Brazilians would finally realize that the prices in Brazil are not high, but the taxes represent a big portion of the price paid. The high level of the Brazilian tax burden is not the real problem, but the inefficiency of the services provided by the state. Many countries, such as Sweden and Holland, charge a higher tax burden to their citizens, but differently from Brazil the taxes are justified by good quality services provided to the population.
In a study made by the Instituto Brasileiro de Planejamento Tributário, known as IBPT, which is the Brazilian Institute of Tributary Planning, Brazil was for the fourth consecutive year placed between the thirty countries in the world that charged the highest tax burden.
To the president of IBPT, João Eloi Olenike, the study reinforces "the need of Brazilian population to demand to the government a better application of the collected resources. Brazilians paid high quantity of taxes to the government, because those are included in the all products and services consumed by them. Such as in rice (17,24%), beans (17,24%), meat (23,99%), tooth brush (31,37%) and others," explain the president.
Demanding the Transparency of the Taxation Charged
Another research developed by Ibope in March, 2013 with 2002 people interviewed in all regions of Brazil, stated that 90% of Brazilians want tax information in the sales slip, while the 10% left does not have a formed opinion about it.
It also revealed that 65% of the interviewed agree that the inclusion of the total value of taxes charged over products and services in the sales slip would allow a more effective way of demanding to the Government a better use of money provided by taxes.
Besides presenting the Brazilian interest in knowing the tax value included in product and service prices, the research also revealed how much the tax burden is underestimated by the citizens. For example, when asked about the tax value applied in canned beer, the participants assumed a burden of only 19,6%, while the real value of taxes charged over this product is 56%.
New Law: "Eye on Tax"
A new legislation named De Olho no Imposto determines the statement, in the receipt, of the approximated taxes over the purchase, being enforced from 2013 on with popular approval. The law obligates companies to indicate the approximated values of the following Brazilian taxes in the receipt:
It also demands that the receipt presents the total taxation in percentages and absolute values and that the stores have also the option to attach posters with the tax amounts, which will be available in a list presented in http://www.deolhonoimposto.com.br/. The list will also be accessible to the population.
To apply this law, a new methodology needed to be developed by the Brazilian Institute of Tributary Planning, responsible for the tax calculations that are charged over products and services. According to the coordinator of the institute, Gilberto Luiz do Amaral, the calculations were made individually, product by product, based in the Nomenclatura Comum do Mercosul, known as NCM, which is the Common Nomenclature of Mercosul of each consumption goods.