The Brazilian federal government is into one of its most serious crisis in an every governments’ crucial staff: tax collectors. 31 top federal tax collecting officials resigned yesterday and more resignations are expected. The Brazilian President Lula blames it on one of his minister’s lack of leadership. Minister Guido Mantega defends himself saying the federal tax collectors’ allegations of interference from the government in tax collecting technical issues are “B.S”., the federal tax collectors claim they were “suggested” to turn a blind eye on big Brazilian corporations, like Petrobras, the Brazilian oil giant that is partly owned by the government.
This crisis started when the head of tax collectors, the long-career public servant Lina Vieira, was fired after Petrobras had been warned by tax collectors that it could not have changed accountancy procedures that saved the company 4,38 billion reais (about 2.20 billion dollars) in taxes owed between December 2008 and march 2009, according to an official note issued by the Brazilian tax collecting department.
The involvement of the Chief Minister Dilma Roussef was not clarified up to now, Lina says she was invited to a “secret meeting” in which Dilma ordered her to leave behind big companies and focus on the investigations about the Senator and former president Jose Sarney.
The crisis reveals a very typical Brazilian conflict of interests in its regulation departments: the government tends to defend by all means (even less that ethical ones) its interests in the companies it partly owns, like Petrobrás, Eletrobrás and other companies that operate in the country’s energy market. Even though the market does not care too much about these attitudes, down the road they may contribute for the lack of credibility on the Brazilian regulation and oversight agencies and institutions.