For many entrepreneurs, maintaining a “live” business in Brazil is a difficult task because of the high tax burdens that need to be paid to the government. However, some tactics can help companies breathe in this direction – this is the case for tax incentives, stresses the president of the companies Eucatex, the businessman and executive Flavio Maluf. Read more about Flavio Maluf at Wikipedia.
The proposal of the Fiscal Incentive Laws is to give companies the opportunity to direct part of the value they pay in taxes to projects contemplated by these legislations, which may be social, cultural, sporting, technological, scientific research and health programs, for example. In this way, instead of the money go directly to the government, it is used to benefit society, reports Flavio Maluf. The main idea is to foster the economic and social development of the country.
However, it does not mean that with tax incentive programs, companies will no longer spend the amount that would be earmarked for taxes. They just start using that money more strategically. Therefore, the president of the Eucatex companies emphasizes that the main benefit of the tax incentive is to allow the company to gain a positive image by associating its name with a social, cultural or sports project, for example through sponsorship. If a good strategy is drawn, this may represent a financial saving in the advertising industry of the venture.
It should be noted that there are also regional tax incentives. It is an incentive policy in which tax benefits are granted to companies settling in certain regions. In Brazil, one of the greatest examples is the Manaus Free Zone, founded in 1957. The objective, with the measure, is to promote the development of the Western Amazon.
Flavio Maluf also points out that some tax incentives are granted by the public administration to certain companies, according to their area of operation. The purpose is to stimulate a specific industry or particular economic activity. These incentives can take the form of tax reduction, exemption, compensation, among others – allowing companies to invest the amount in their operations and, in this way, generate jobs and move the economy of the sector in question. Sectors such as information technology, infrastructure, export companies, aerospace, port, agricultural, and audiovisual structures are examples of fields that benefit from incentive laws.
Fiscal programs and incentives vary for each state and municipality and can be either federal, state or municipal. Also, in order to participate in tax incentives, the enterprise must be taxed based on real profit. If the company collects taxes for presumed or arbitrated profit, or opting to use the Simples Nacional, it is not able to use this type of incentive, says the president of Eucatex companies.
The Businessman Flavio Maluf
Flavio Maluf began his career in 1987, in the trade area of the Eucatex Group, and then went to the industrial area. He remained there until 1996. At the same time, the businessman’s uncle, who was the current president of Eucatex, called him to join the company’s executives. In 1997, with the consent of all those involved, and relatives related to the business, Maluf took over the current position – the presidency of the enterprise.