With each inclusion in , the conflict of interests behind the country’s economic rules becomes clearer. The original idea — a simpler and more neutral system — loses strength as influential groups gain advantages. This turns it into a moving target, stretching it beyond what was anticipated and eroding the effectiveness of changes.
The concession in the Manaus Free Zone or the tax reduction for Football Limited Companies (SAFs) are not isolated cases. The same film has been seen in recent episodes, with agribusiness pleading or pushing for reduced taxes. The repetition of the plot is not surprising, but it is worrying, consolidating the perception that the Brazilian tax system remains subordinated to well-articulated interests.
Economist Gordon Tullock, when studying the (search for privileges), showed how organized groups use resources and political influence to obtain exemptions, subsidies and trade barriers. These strategies do not create new wealth, on the contrary; they only transfer income from the majority to the few, generating inefficiencies and invisible costs. As a consequence, resources are no longer applied productively and start to support niches protected by such concessions.
Each sector justifies its different treatment with arguments of economic or social relevance. The advocates lower taxes on an extensive basic food basket claiming to benefit the poorest; the Amazonian industry invokes distance and logistics; football clubs extol the cultural value of the sport. In the end, those who pay the bill are companies without access to the halls of power and, mainly, the population without the means to negotiate lower import taxes.
This dysfunctional political context not only compromises the clarity intended by the reform. The proposal to unify taxes into IBS, CBS and a Selective Tax on certain goods and services should facilitate understanding and simplify obligations. By giving in to pressure, the fire of exceptions is reignited, making the calculation more opaque, requiring compensation in other links in the production chain and perpetuating a vicious cycle that prevents fiscal neutrality.
The federal government’s inability to firmly coordinate negotiations exacerbates the problem. Without a multiplication of exceptions, with each new demand more benefits arise for specific groups, keeping the lobby well lubricated. Society is faced with a dilemma: accept a system fragmented by privileges or face the increase in the standard rate, an inevitable consequence of these arrangements.
This concentration of special benefits has indirect effects of great magnitude. In practice, these are lost opportunities, misdirection of resources and perverse incentives that reward political influence, not efficiency. Price is a less dynamic, less innovative and less transparent economic environment.
Thus, the much-proclaimed tax reform runs the risk of becoming a scenario of endless bargains. With each concession, we move further away from the original objective of a coherent system with healthy economic foundations. In the end, there is a bitter sensation of wasted potential due to the insistence on sustaining the search for privileges. The hope remains that, with greater visibility of these maneuvers, society will become aware of the real winners and losers.
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