Government going after big debtors to recover unpaid tax

The total amount of debt that 4.6 million Brazilians and companies operating in the country currently have with the federal government equates to a stonking 32 percent of Brazil’s GDP. While ongoing discussions toward a vast overhaul of the country’s tax system seek to solve future problems by simplifying the way tax is paid in Brazil, the country’s three branches of power are also getting their heads down to try and design measures to recover this BRL 2.2 trillion debt mountain.

Moving in this direction, the Supreme Court recently decided to make the nonpayment of declared State Goods and Services Tax (ICMS) a crime, as opposed to a mere tax violation. With a variety of different rules from state to state, ICMS is among the most costly for Brazil’s production chains and is one of the hardest taxes to properly calculate. Now, business owners who declare ICMS tax and do not pay it may...