Corporate tax bureaucracy and BPS as a growth strategy
Por Madeleine Blankenstein
Brazilian corporations are among their global peers the ones that mostly invest time to determine and pay their taxes. The cost is astronomical, not only in physical spaces (to keep all the documentation), but also in skilled labor, to maintain its compliance operations, due to the huge amount of support documents required by the Treasury. Even with the use of technology, the cost is high because corporate software needs to interface with the tax authorities’ websites prepared to receive the digital information.
For that matter, there is still bureaucracy in preparing a company in the beginning of operations (obtain the Federal Tax Id number-CNPJ, open a bank account, among others), besides being a costly and complex process for the foreign investor.
According to the World Bank, Brazil is the record holder country in time spent by companies to pay their taxes. They spend 1958 hours a year, that is, more than 80 days just to work with these red tape issues.
That is a considerable time. After all, according to Portal Tributário there are 93 taxes, contributions, fees and contributions of improvement existing in Brazil, which demands professionals specialized in direct and indirect taxes to mitigate risks with undue payments and/or fines for not following the changes of the Internal Revenue Service.
These professionals still need to be aware of which tax regime is most appropriate for the nature of the business, which municipalities offer better tax incentives and whether it is necessary to check the possibility of accumulated tax credits to optimize cash.
All this time prevents companies from investing in what really matters for the development of their business. Data show that while entrepreneurs are optimistic about the economy, only slightly more than half (56%) believe they will invest in Research & Development this year.
BPS as a growth option
In order to optimize their operations, organizations have invested in outsourcing these bureaucratic activities using BPS – Business Process Solutions. According to research on the subject, 40% of 2.571 companies surveyed are likely to hire outsourcing services (BPS).
By combining technology with the technical knowledge of professionals in accounting, tax and labor matters, Business Process Solutions offers security and compliance in the bureaucratic processes of organizations, which allows BPS companies to become strategic partners for business development. According to the study, reliability of service, cost and trust in the supplier are the determining factors for choosing this type of service.
With the expectation of economic growth in 2019, this scenario will become even more visible and being prepared to reduce the time spent on bureaucracy and invest in the core business, will be the key to growth.
HLB Brasil can help you grow your business! Contact our Business Process Solutions team!