Almost 40% of the additional money Brazil’s government requires to balance its budget next year relies on a particular plan: the head lawyer at the Brazilian Treasury using a firmer approach to settle around 67 billion reais (about $13 billion) in tax disagreements.
Anelize Almeida, the Attorney General of the Treasury, expressed her belief that she could secure even more.
Her optimism stems from a recent alteration in the rules governing tax disputes. This change dictates that in cases where there’s a tie vote on the federal tax appeal board CARF, which handles tax disputes between individuals and companies and the government, the government automatically wins.
Several private economists have doubts about Finance Minister Fernando Haddad’s revenue forecasts. They suggest that he should reduce government spending to ensure that it adheres to its ambitious new fiscal guidelines.
However, Almeida is unwavering in her belief that the revenue from tax disputes can be higher. She emphasizes that apart from what’s already outlined in the 2024 budget, the government is closely examining the 100 largest and most promising tax cases currently in the courts, potentially involving around 180 billion reais.
“What ultimately matters is the profit,” she explained. She also noted that the state-run oil company, Petrobras, which is part of four cases involving approximately 40 billion reais, has shown a greater willingness to negotiate a settlement.
Among the 100 legal cases she is prioritizing, there are companies that have put down a deposit as collateral in their disputes, making it more likely that the government will receive actual payments.
Regarding CARF, where companies that lose to the government can later appeal in court, she pointed out that the revenue forecasts only capture a fraction of what’s at stake. She mentioned that within a subset of 1,500 cases, there’s approximately 800 billion reais in play.
“As for CARF, handling 1,500 cases in a year is entirely feasible and quite reasonable,” stated the Treasury’s attorney general.
(Note: The currency exchange rate is $1 = 5.1863 reais.)
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