Brazil: Dictatorship of the Tax Man Declared!

Tupi revenuers in hot pursuit of the Dukes of Moral Hazard: Companies suspected of underreporting income.

Receita Federal vai atrás de 6 mil empresas que devem impostos: “Brazilian federal tax authority goes after 6,000 companies that owe back taxes.”

G1/Globo reports.

It seems that fellow we talked to in a recent corner bar conversation was right: Communist terrorists who are the moral equivalent of al Qaeda are out to create a new dictatorship of the tax-and-spend welfare state.

He really said that. He also explained to us how to create funky, byzantine interstate corporate tax shelters, and that people from the Northeast are subhuman troglodytes. That was quite a bar conversation. Who brought that guy, anyway?

The tax authority recently swore in a new chief tax collector, amid a barrage of editorials warning the office was being “politicized.”

In Brazil, you tend to describe the police as “politicized” if you are happen to be politically connected and the police happen to arrest and charge you. See, for example,

• The Persecution of Daniel Dantas: An Italian Opera in (?) Acts
• Cultural Reference Lexicon Entry No. 48: Daslu

Until recently, tax collection and collection of social security contributions were handled by separate agencies, which have now been combined. The new top taxman (a woman, actually) was quoted last week as saying that the transition led to “chaos” at the agency. Mightily pissing off her predecessor with the implied criticism, as the Estado de S. Paulo made a point of pointing out.

A Receita Federal anunciou nesta sexta-feira (8) que vai iniciar na próxima semana uma nova operação, com fiscalização “in loco” pelos auditores, desta vez para fiscalizar 6.032 empresas que omitiram receitas. Ao omitir os valores, as empresas pagaram menos impostos do que deveriam e, deste modo, sonegaram tributos. Com isso, obtiveram vantagens competitivas frente a seus concorrentes.

The Brazilian federal tax authority announced on Friday (August 8) that it will commence a new operation next week involving on-site audits of 6,032 companies that failed to report income. In failing to report income, companies pay fewer taxes than they ought to and are therefore engaging in tax evasion. In this way, they obtain competitive advantages over their competition.

Mexico: Did Big Tech Dig Undermine Calderón’s Tax Man?

Miguel Badillo is a Mexican investigative journalist and author of “ISOSA: Fraud on the Nation”

Oficio de Papel (Mexico): Miguel Badillo analyzes the resignation of Mexico’s top tax collector, wondering whether or not it has to do with the ISOSA case and the failed enterprise integration Big Dig that Oracle was hired to do for the Mexican Hacienda (Treasury).

On which see also:

• Badillo: “Oracle’s Mexican Tax Big Dig Sinks Deeper?”
• Mexico: Oracle is Ambiguous in Wolfowitz-Funded Tax-Tech Big Dig!
• Mexican Tax Man: Bad Business Logic Behind Miscounted Beans
• Mexico: ISOSA Probed by Mexican Congress
• Badillo: Oracle-Powered Mexican Tax Machine Bogs Down
• Badillo: Peoplesoft and the Iron Auditor

I note it because I am in the habit of noting stories about tech audits of Big Digs. I have actually worked on a few. It is an interesting, though nerdy, subject.

Mexico-Microsoft’s Enciclomedia “revolution in e-ducation” and the Hildebrando117 affair are other “make a run for the border” cases I have been following:

• Mexico: What the Education Committee Resolved to Say About the Enciclomedia Program
• Did Harvard Really Declare the Enciclomedia Program Useless?
• Mexico: “Enciclomedia Audit Awards No Plaudits”
• Mexico: “Enciclomedia Runs No Risk of Being Discontinued”
• Mexico: Hildebrando117 Journo Summarily Ratfinked For Refusal to Cede Editorial Independence
• Hildebrando117 Reloaded: Remembering the Aristegui Demonstration
• “PAN’s Dirty Hands”: More Hildebrando Data Brokerage-Jokerage?

June 16, 2008
Translation C. Brayton
[excerpt]

Oracle: a lucrative deal

It has not all been crystaline transparency at the Mexican federal tax authority (SAT) during the administration of the man who is principally responsible for squeezing taxpayers for what they owe, because there are many taxpayers, principally big taxpayers, who still do not pay what they owe. Suspicions have emerged during his five years at the helm of SAT, according to critics of this federal bureaucrat who shies away from the press, that provided the motive for his firing.

Among the cases that raise doubts about Zubiría Maqueo was the audit commissioned by the SAT from KPMG, and paid for by the “private” firm ISOSA (a corrupt enterprise created on the orders of Fox Treasury secretary Francisco Gil Díaz) – in which it was revealed that the Integrated Solution Platform, developed by Oracle, does not work, despite which the SAT signed contracts on the systems worth in excess of 50 million pesos.