STF denies action on sharing tax evaders’ data with the MP

The Federal Supreme Court (STF) rejected, this Thursday (10), by eight votes to one, an action proposed by the Attorney General’s Office involving the sharing of data from the Federal Revenue Service with the Public Ministry in relation to potential crimes of tax evasion.

The ministers rejected the request made by the PGR, which wanted a part of a 2010 law to be declared unconstitutional.

Ministers Nunes Marques (rapporteur of the action), André Mendonça, Rosa Weber, Edson Fachin, Cármen Lúcia, Ricardo Lewandowski, Gilmar Mendes and Luiz Fux rejected the action.

The only minister to partially vote in favor of the action was Alexandre de Moraes.

The questioned provision was included in a provisional measure of 2010, which dealt with measures related to the holding of the World Cup and the Olympics.

According to the excerpt, the Federal Revenue Service is only authorized to share the information as soon as there is a final decision at the administrative level that definitively confirms this debt.

The position of the PGR

In the action, the Attorney General’s Office stated that “conditioning the notitia criminis to the exhaustion of the tax administrative process prevents the Public Ministry from accessing relevant elements of information so that it can file the complaint”.

“In practice, there is an obstacle to the exercise of the state’s punitive claim, in the face of consummated crimes, since ordinarily the knowledge of criminal facts comes from the communication of the Revenue’s servants”, he declared.

In addition, for the PGR, the section of the law that imposed this rule was included in a provisional measure unrelated to the proposal, being an “absolutely foreign device”.

“There was also a clear abuse of extraordinary competence to adopt provisional measures, in view of the non-observance of the formal and material presuppositions that limit their edition in the Constitution”, he declared.

Moraes criticizes the law

The only minister to partially vote in favor of the PGR action, Alexandre de Moraes harshly criticized Brazilian legislation.

For the minister, Brazil “brought everything wrong to fight tax evasion” and there is an “incentive to evasion” in the country.

“There are two ways in the world to fight tax evasion: the right way and ours. Brazil brought everything wrong to fight tax evasion, including this law. All wrong. Brazil bets on the bad payer. There is a historical evolution, it started in 1945, in which the tax evader who paid in the 1st Instance would extinguish the punishment. This was involuting and if paid before the denunciation, the punishment would be extinguished. Now, if you pay at any time, the punishment is extinguished,” he said.

“This is the incentive to evade. The tax evader is caught and will pay for what? He’ll wait, he’ll roll around. He loses administratively, he is denounced. Only when he realizes that there is not the slightest chance of winning does he call. Unfortunately, this is reflected in the collection and this is reflected in the social security issue”, he added.