Brazil has one of the highest tax burdens in the world, similar to developed countries such as Switzerland, while the quality of public services provided is similar to that of developing countries such as Zambia. We will explore the impact of this imbalance, the application of income tax and how Pix monitoring has reinforced this reality.
Brazil has a tax burden that exceeds 33% of GDP, according to data from IRS, an index close to that of highly developed countries, such as Switzerland. However, the application of these taxes and the return in the form of public services such as health, education and security are disproportionate.
While Switzerland offers high-standard services financed by taxes, Brazil has recurring problems of poor infrastructure, overcrowded hospitals and lack of resources in public schools, even though it collects similar amounts of money.
Pix monitoring and increased oversight
O Pix, an instant payment system, has been used by IRS to intensify control over Brazilians’ financial transactions. Although the objective is to curb tax evasion, the increase in inspection was not accompanied by an improvement in public services.
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Large and recurring transfers can be interpreted as taxable income, resulting in fines and penalties for those who fail to declare correctly. Small business owners, self-employed professionals and even ordinary citizens have felt the impact of this stricter surveillance.
Practical example: The impact of Pix and income tax
Suppose a Brazilian citizen receives R$6.000 monthly via Pix from different sources, without formally declaring it as income. According to the current table of income tax, he would be subject to the rate of 27,5% on part of that amount.
Even with the payment of taxes, he faces deficient public services, such as long lines at the SUS, poorly structured public schools and outdated security. In Switzerland, a citizen who pays the same tax burden has access to cutting-edge hospitals, excellent education and effective public security.
Why does this imbalance persist?
Some factors that explain this disparity include:
- Mismanagement of public resources: Lack of transparency and inefficiency in budget application.
- Corruption: Financial embezzlement and scandals reduce investment in essential areas.
- Excess indirect taxes: Brazil concentrates a large part of its revenue on consumption taxes, which penalizes the middle and lower classes more.
How to protect yourself and pay taxes consciously?
To avoid problems with the IRS and income tax, follow these practices:
- Full statement: Report all income correctly, including amounts received via Pix.
- Consult an accountant: Specialized professionals can assist with tax planning.
- Financial control: Keep detailed records of income and expenses to avoid tax inconsistencies.
Brazil collects taxes like a rich country, but delivers public services far below expectations. Monitoring the Pix and the rigidity of the income tax reinforce this imbalance, impacting mainly small taxpayers. It would be time to rethink the country's tax model?
These advertisements for “the richest women in Santa Catarina” are ridiculous.
It was not mentioned that middle and high-ranking civil servants in Brazil receive higher total remuneration than their counterparts in Switzerland. The drains that drain our taxes are: too many tax incentives and benefits, rampant and generally unpunished theft, incompetence, lack of priority and lack of strategy in the application of resources, a bloated and very expensive state machinery, and welfare programs that hunt for votes without filtering or rigorous investigation of the real conditions of the beneficiaries (examples: younger couples do not even get married officially and the mother lies that she is the head of the family in order to receive double the benefit; many have profitable formal activities that would make them pay income tax, but lie that they do not make any income tax or declare very low income). Additionally, the government does not force the so-called single mothers who are heads of families to file a lawsuit to demand child support from the child's father; the courts easily grant LOAS payments left, right and center; and it's full of old people who receive BPC with children who are well off financially, that is, supporting the children and parents of others who could do this, falls on all taxpayers.
Salaries that are out of line with the country's reality and competence equal to that of the president...