Custo Brasil

THE ECONOMIST analisa a complexidade do "custo Brasil"

Untangling the custo Brasil

Aug 20th 2012, 10:26 by H.J. | SÃO PAULO

"I PAY so many different taxes: registration fees, union fees, social contributions, payroll taxes and taxes on profits," says Angela Sardelli, the boss of Vox, a Brazilian company that trains telemarketers for other businesses. The number and complexity of those taxes—municipal, state and federal—means even small firms have to get specialist accountancy advice. "If you don’t do this, you’re running a really big risk," she says. "If you make a mistake, fixing it means trekking between different government offices, and paying fees and fines." So many taxes have nothing to do with her cash flow that on occasion, she has had to take out bank loans to pay.
High and complex taxes are only some of the obstacles businesses face in Brazil: poor infrastructure, outdated labour laws and reams of red tape also trip them up. These difficulties are so longstanding that they have their own name: the custo Brasil, or "Brazil cost". So it is no surprise that with excess capacity in the rich world and the real, Brazil’s currency, not far off its all-time high, the country’s manufacturers are struggling to compete globally.
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