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 US-based Cisco, a multinational that designs and sells communications technology, and over 30 Brazilian and foreign companies in the area of technology are involved in a smuggling and tax-evasion scheme broken today, October 16, by the Brazilian authorities.
According to Brazil's federal police, who worked with the Internal Revenue service and the Public Attorney Office, the tax fraud brought Brazil a loss of about 1.5 billion Brazilian reais (US$ 832 million) to the nation's coffers, including non-paid taxes, plus fines and interest. The police operation was nicknamed Persona.
The police also seized US$ 290,000 and 240,000 reais in hard cash, products valued in excess of US$ 10 million, one executive jet and 18 vehicles, according to police chief Érika Tatiana Nogueira, responsible for the Operation Persona enquiry.
The firms involved, say the Brazilian authorities, imported irregularly IT equipment valued at US$ 500 million in the last five years. US$ 500 million dollars was the declared value.
The police believe that thanks to the fraudulent plan those involved in the scheme were importing a monthly volume of 50 tons in products from the American multinational.
Brazilian authorities say that in order to pay less taxes, those involved in the scheme would overbill hardware, which has a lower tax tariff and underbill software.
"The Brazilian computer industry has to face a very stiff competition from smugglers," said acting Minister of Justice, Luiz Paulo Barreto. "We've just dismantled a formal import scheme that was causing tremendous loss to the Brazilian industry and to jobs in the sector."
The arrangement used off-shore companies located in fiscal paradises like Bahamas, Panama and British Virgin Islands) with assistance from a law firm specialized in foreign trade and international law. This system guaranteed that the name of the real importer of the Cisco products would remain anonymous.
The police arrested 40 people and another four are still being sought by the authorities. Among those taken into custody are the president and directors of the Cisco branch in Brazil and six tax auditors.
The arrests were made in the Northeast (Ilhéus, Salvador) and the Southeast (São Paulo, Santos, Campinas, Rio de Janeiro) of Brazil.
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Simple demonstration that your tax rate on foreign goods in the IT sector is 160 % !!!!
With such a high import tax rate, look no further as to why Brazil has one of the world LOWEST economic growth rate in the last 5 years.
Development and growth are simp'ly unnafordable and impossible, when your already LOW GDP per capita is further penalized by high costs of products that are heavily taxed.
And do you really believe that developed countries will negotiate on agriculture only.....AT THE WTO....as you are dreaming for ?????
More idiots than Brazilians there is not on earth. You just cannibalize and penalize your own economic growth rate !