The government of Brazil has made it difficult for entrepreneurs to maintain their business due to the heavy tax burden imposedo them. Flavio Maluf, the executive of Eucatex and a renowned businessman, has suggested ways in which such companies can get a reprieve, and that is through taking advantage of the tax incentive laws.
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The Fiscal Incentive Laws operate in the precept that a business can, instead of directing their tax to the government they are allowed to lead their contributions to projects in the society such as health research, education or other social programs to foster economic and social development. This tax incentive program can also serve as a way for the businesses to give back to the public and their contribution can be experienced fast hand in the betterment of the people.
Through the program, the businesses associate their names with the various projects in the society which acts as a marketing strategy for them. They gain more traction through customers appeal to attract and reach out to a more significant market.
The incentive law which was established in 1957 operated in specific areas where the government saw it necessary to involve native companies in their development agenda, the areas where the code operated is referred to as ‘Manus Free Zone.’ The government through their public administration arm is at liberty to target specific firms and administer the incentives either through tax exemption, tax reduction or compensation. This bias is supposed to be an avenue for job creation and a mode through which the economy develops in a trickle-down effect, for example, if a company targets its tax to roads construction, it promotes the transport sector and other dependent sectors.
The businesses that are involved in this agenda have to be transparent in disclosing their real profit this ensures that the money they input is commensurate with the gains they receive. The fiscal plan varies from state to state with each having their particular allocation criterion based on their social development need as assessed by the government, and execution can is by either the federal government, municipal or state.
Learn more: https://www.crunchbase.com/person/flavio-maluf