BRASILIA: Brazilian authorities said they uncovered a tax fraud scheme at the Finance Ministry’s tax appeals board that may have cost taxpayers up to 19 billion reais ($5.96 billion).
The news came in the midst of a multibillion-dollar corruption scandal at state oil company Petroleo Brasileiro SA, or Petrobras, that has rattled Brazil’s political establishment and weighed on the fragile economy.
In the latest case, federal police inspector Marlon Cajado said companies bribed members of the CARF, a body within the Finance Ministry that hears appeals on tax disputes, to get favorable rulings that reduced or waived the amounts owed.
Police said they were investigating 70 companies, which were not named. Members of the tax appeals body, as well as tax consultants and lawyers suspected of acting as intermediaries in receiving bribes, are also being probed.
So far, investigators have detected suspect decisions that cost the state 5 billion reais in tax evasion and are probing other cases that could raise the total to 19 billion reais, Brazil’s tax agency said in a statement.
The cases under investigation came before the board between 2005 and 2013, well before current Finance Minister Joaquim Levy took office.
While Levy will not be held responsible, the tax fraud case could worsen the political climate at a time when the popularity of President Dilma Rousseff’s government has plummeted due to the Petrobras scandal and a stagnant economy.
“It further clouds the atmosphere,” said a finance ministry official who requested anonymity due to the sensitivity of the matter. “Our only alternative is to crack down on corruption.”
Police raided the offices of the tax appeals board in Brasilia, and the homes and offices of tax consultants and lawyers accused of involvement in the fraud scheme in Brasilia and the states of Sao Paulo and Ceara.
They seized documents and 1.3 million reais in cash, but no arrests occurred, Cajado said at a news conference.
He said industrial, agribusiness and civil engineering companies and banks paid bribes of up to 10 percent to “manipulate” rulings in disputes over cases that involved between 1 and 3 billion reais in taxes due.
The suspects face charges of influence peddling, corruption, criminal conspiracy and money-laundering, which carry prison sentences of up to 50 years. Companies accused of paying to obtain favorable rulings will have their cases reopened.
