Lawyer Sergio Rosenthal warns that a new 10% tax on incomes above R$ 50,000 could foster feelings of injustice and promote tax evasion if not matched by public services.
Sergio Rosenthal, a financial crimes lawyer, has expressed concerns regarding the recently approved 10% tax on incomes exceeding R$ 50,000, designed to offset the exemption for earnings up to R$ 5,000. He argues that without corresponding improvements in public services, this tax increase may provoke a sense of injustice among taxpayers. This measure, touted by Lula's government as a significant accomplishment, is positioned as a key point in Lula's re-election campaign.
Rosenthal emphasizes that rising tax burdens can lead to a lack of acceptance among those who bear the cost, especially if they do not see tangible benefits resulting from the taxes they pay. He highlights that the perception of tax justice is crucial for compliance, suggesting that when people feel they contribute more without receiving adequate public services, it fosters resentment and moral justification for tax evasion in the Brazilian context.
Furthermore, he points out that this additional tax will impact major law firms, which might lead to unintended consequences, such as increased tax evasion. In Brazil, where tax evasion is often viewed less as a crime and more as a normal behavior, Rosenthal's warnings resonate deeply. The implications of this tax policy, he argues, could undermine governmental revenue efforts and exacerbate feelings of social inequality among taxpayers.
