|Brazil Needs a Tax Break|
|Tuesday, 12 April 2011 09:15|
Society must leverage information for better government
During a recent gathering of industrial leaders in Rio de Janeiro, Eliezer Batista da Silva mused that Brazil has the "taxes of Sweden and the services of Angola." It's an old saw, but gained an extra bite in the mouth of Batista, a founder of the multinational mining conglomerate Vale and the father of Brazil's richest man, energy mogul Eike Batista.
The case for reform is well taken. Brazil has the highest tax-to-GDP rate in the western hemisphere, over 35 percent. Worse, Brazilian taxes are so numerous and their codes so complicated that experts say the system encourages informality (hence, tax evasion), discourages innovation, and retards Brazil's development beyond commodity-based production. There has been no scarcity of proposals to fix the tax system over the years, but most have run into political roadblocks. The principal problem is resistance from federal, state, and municipal governments fearful that any reform, one way or another, will cost them tax receipts.
If the business community wants to make a compelling case for tax reform, the first step should be to shine a light on how government could be saving or allocating resources more efficiently- how they could be doing better with less.
The media and citizens need to lead, but greater public sector transparency is a key precondition for effective monitoring. To this end, Brazil has an important tool in its hand, the sort that insiders call comprehensive transparency infrastructure and what everyone else knows generically as a public information law (PL 41/2010). Introduced by Dilma Rousseff in 2010, when she served as Chief of Staff to former president Luiz InÃ¡cio Lula da Silva, the law passed the Chamber of Deputies in April 2010 and only awaits sanction in the Senate.
The law not only provides obligations for the Brazilian government to â€˜proactively' publish information about spending and regulation, but it also mandates that governments disclose copies of most primary documents upon request. This is key because greater transparency means better government. Ever aware that society may be looking over their shoulder, public sector officials are driven to do their jobs in a more organized, efficient and accountable manner.
It is time for Brazil to join the vibrant global movement towards openness. Freedom of information is a fundamental human right enjoyed by more than 5 billion citizens in more than 90 countries. Half of these countries have enacted laws within the last decade, including 12 Latin American nations, the latest of which was El Salvador on March 3rd.
Some countries have already moved on to a new stage of openness, providing citizens with aggregate open-format datasets. Examples include the U.S.'Â http://data.gov/Â and the U.K.'s http://data.gov.uk. The proposed law now in the Brazilian Senate, 41/2010, includes a similarly modern provision for releasing open-format data.
The main obstacle to the passage of the law is not so much the fear of exposing corruption, inefficiency, and incompetence, but a resistance to opening the vault of the 1964-85 dictatorship to public scrutiny. Certainly, the law 41/2010 prohibits information from being withheld if it is pertinent to the investigation of human rights abuses. But this is above all a law designed forÂ everyday citizens. It honors the Brazilian public's right to informationÂ as stipulated in the constitution of 1988, articles 5 and 37.
If Brazil is to achieve good government - never mind saner taxes or a meaningful public sector reform - business leaders and citizens first need to draw attention to spending, waste, and misplaced funds. Only by building laws that guarantee the free and unfettered access to information can an emerging society as important as Brazil's monitor and enforce the efficient - and democratic - allocation of resources.
Greg Michener earned his Ph.D. in political scientist in 2010 and is writing a book on transparency and freedom of information in Latin America for Cambridge University Press. He lives in Rio de Janeiro with his wife Carolina.