The city of São Paulo fines 195 businesses for tax fraud.
The São Paulo City Hall has already fined 195 businesses for suspected fraud in the collection of the Service Tax (ISS); the fines total R$ 27,5 million, of which R$ 2,4 million has already been paid by the construction companies responsible for the works; the municipal administration agreed to allow payment in installments of R$ 1,7 million owed by companies that could not prove payment of the tax.
Daniel Mello - Reporter for Agência Brasil
The city of São Paulo has already fined 195 businesses suspected of fraud in the collection of the Service Tax (ISS). The fines total R$ 27,5 million, of which R$ 2,4 million has already been paid by the construction companies responsible for the works. The municipal administration agreed to allow payment in installments of R$ 1,7 million owed by companies that could not prove payment of the tax.
The audit of the ISS (Service Tax) collection system began after the discovery of a fraud scheme that operated from 2007 to 2012. To date, 218 cases have been analyzed; of these, 23 were cleared without penalty. In 18 cases, companies did not meet the deadlines for submitting documents, and 177 failed to prove payment of the ISS due.
According to investigations by the Public Prosecutor's Office (MP), four tax auditors from the city hall received bribes to reduce the amounts that should have been collected as taxes. An electronic spreadsheet seized by the MP shows that, in 16 months, from June 2010 to October 2011, the criminal group collected R$ 29 million in bribes from 410 real estate developments. The loss to public coffers is estimated at at least R$ 500 million.
Following the conclusion of the administrative investigations, the former Deputy Secretary of Municipal Revenue and career employee, Ronilson Ferreira Rodrigues, the former Director of the Collection and Enforcement Department, Eduardo Horle Barcellos, the inspection agent Luis Alexandre Cardoso de Magalhães, and the former Director of the Property Registry Division, Carlos Augusto Di Lallo Leite, were dismissed at the end of June.
As investigations indicated that the gang also defrauded the collection of the Urban Property Tax (IPTU), the city hall is inspecting properties suspected of irregularities. In 29 of the 48 properties analyzed, problems were found, such as a larger built area or actual area than declared. For these cases, administrative proceedings have been initiated, and the owners will have to prove the calculation of the tax.