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 19bn reais ($5.96bn).
The news came in the midst of a multibillion-dollar corruption scandal at state oil company Petroleo Brasileiro SA, known as 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.
Cajado said 70 industrial, agricultural, civil engineering and financial companies, including banks, were being investigated on suspicion of bribing tax officials.
Early, police raided the offices of the tax appeals board in Brasilia, and the homes and offices of tax consultants and lawyers suspected of acting as intermediaries.
They also raided the headquarters of Banco Safra SA , Brazil’s eighth largest bank, owned by Lebanese-Brazilian billionaire Joseph Safra and his family, according to two sources with knowledge of the situation.
So far, investigators have detected suspect appeals rulings that cost the state 5bn reais in tax evasion and are probing other cases that could raise the total to 19bn 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 seized documents and 1.3m reais in cash in the raids in three cities, but no arrests occurred, Cajado said at a news conference. Reuters
