‘High tax burden fuels smuggling and tax fraud’ (with Diogo Feio)

‘It is true that the high tax burden on certain specific consumption results in an increase in smuggling,’ begins Diogo Feio, consultant in the Tax Law Department at SRS Legal. ‘It has been studied that an excessive tax burden generates a greater risk of illegality,’ says the expert.

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As a solution to cases such as the one described above, ‘the State should moderate its tax drive, focus its inspection activities on combating potential cases of fraud, and, in budgetary terms, provide the means for tax justice,’ notes Diogo Feio. In other words, he adds, ‘taxation should be moderated and made more transparent; inspections should be carried out efficiently and better conditions should be created for justice, whether judicial or arbitration.’

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In conclusion, ‘these measures must be taken in a concerted manner and not separately,’ argues Diogo Feio. ‘Transparency and effectiveness will be decisive for their success,’ he concludes.

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Diogo Feio, a consultant at SRS Legal, points out that it should also be noted that ‘in addition to the value of customs duties, the perception of instability in their determination is very relevant’. This factor, he explains, ‘may also lead to an increase in illicit trade’.

Translated with DeepL.com (free version)