Brazilian authorities on Thursday 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 (4.01 billion pounds). 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 favourable rulings that reduced or waived the amounts owed. About 70 industrial, agricultural, civil engineering and financial companies, including banks, were being investigated on suspicion of bribing tax officials of up to 10 percent to “manipulate” rulings in cases that involved between 1 and 3 billion reais in taxes due.
It further clouds the atmosphere. Our only alternative is to crack down on corruption.
Finance Ministry official who requested anonymity
While current Finance Minister Joaquim 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. The news came in the midst of a multibillion-dollar corruption scandal at state oil company Petroleo Brasileiro SA (PETR4.SA), known as Petrobras, that has rattled Brazil’s political establishment and weighed on the fragile economy.