Tax Relief Brazilian Style

The main counter measure that the Brazilian government implemented to prevent the international economic crises to reach our shores was to reduce federal taxes on buying new vehicles. The cut started in December 2008 and varies from 6 to 7 % of the total price, depending on the model, since buyers of cars with smaller engines will not pay the tax for industrial goods (IPI) at all.

Surprisingly, this plan really made sales take off, considering that they had plummeted from September to December – as it happened all over the world – and suddenly began to grow reestablishing sales figures of the same months of 2008, which was already a record high in our automotive industry.

The tax relief was supposed to last only until march the 31st, but the government has already decided to maintain it at least until June, although it is demanding some compromise by the automakers not to lay off workers during this period.

This was such a good idea because the Brazilian market is not so dependent on credit, as the American. Even tough the government is also looking for providing credit to buyer of new car (and now studying doing the same to used cars market) the thing is that people in Brazil have a very recent history of debt build up, which facilitate things immensely.

The other reason it seems this kind of thing would not work to help US automakers is that there are very few taxes on cars to be cut, whereas in Brazil it represents about 50% of the final price (in the US, as far as I know it’s much, much less). The other thing is that taxes on cars in the US are mostly due for the States, which are already broke and cannot afford to provide consumers with such relief as the Federal Government can here in Brazil.

Walks of Life

Many people pose me the question why do I go to work walking, instead of using my car? The answer, although obvious to me, deserves a post here, so let’s see…

The amount of cars in our streets are almost unbearable, as far as locomotion is concerned. I went through a post today in a friendly blog http://kiminda.wordpress.com/2009/03/02/carros-demais-no-pais/ that says that from January to November 2008, the number of cars in the streets of São Paulo, Brazil’s largest city, increased on a rate of 5,8 %, or 372,316 vehicles in absolute figures, all of this in last than a year.

People who work in São Paulo are staying late in their jobs not to be stuck in massive traffic jams, mostly in raining afternoons.

The collapse in transportation hadn’t reached Porto Alegre, city of about one million people, in which I live, but still you can loose about one hour to get home after work.

Still, anticipating all that trouble and getting in shape (or at least trying to), I am one of the few people that would rather walk home than take another mean of transportation.

Not that I live next door to my office: on the contrary, it takes me half an hour of stroll, not always the most agreeable thing (mostly in warm days), but at least my level of stress is considerably reduced, and I happen to have some excellent ideas while walking (you know, the brain is more oxygenated and all that…).

Anyway, the simple way of putting it ― one that needn’t all this explanation ― is that I went green. It’s fashionable and easy to understand ― even for an irritated cab driver.

Why treaties are not fully observed in Brazil?

International attention has been drawn to the dispute of the custody of eight year old Sean among US and Brazil so much that this is meant to be a topic on these nation’s presidential meeting, scheduled for next month. Although child abduction is a sore topic and implicates into delicate disputes over different countries, this should not be the case regarding US – Brazil relations, considering that both countries have signed the Hague Abduction Convention.

In fact, the theory that determines the application of treaties in Brazil is the dualist, that does not considers treaties as part of the nation’s legal system. It means that, even after signature by the president of the country (executive branch), the treaty, in order to be applied to the citizens, must be approved by the congress (legislative branch).

The United States has a similar understanding of incorporation law (the Treaty Clause of the Constitution).

The problem is that, once ratified by two thirds of the Senate, the Treaty, in the US, becomes equivalent to the “Supreme Law of the Land”.

In Brazil, even with the recently adopted 45th amendment of the 1988 Constitution, only the Treaties regarding Human Rights will be at the same level of the Constitution, meaning that all other treaties, such as the Hague’s Child Abduction Convention, are considered equivalent to federal law, and therefore, beneath the Constitution.

This is the main reason why Treaties are not seen as an instrument of cooperation between countries by the Brazilian Judicial authorities: there will always be an interpretation to prevail with the Constitution or even the law of the land over international treaties, which seems to be the case, if not of the infant Sean, but certainly the majority of the 50 unresolved Hague Convention cases involving children who were abducted from the United States and are being kept in Brazil, according to the State Department of the US, in today’s edition of the New York Times.

As Justice Gilson Dipp of the Brazilian Superior Court (STJ) recently stated “The Judiciary can be a bridge or a barrier to international cooperation”. Because of our legal culture, not necessarily ignorance, in Brazil it has been more a barrier than any other thing.

This blog presentation

Hello, dear visitors!
This blog is intendend to be a place for discussion on legal subjects regarding South America’s largest country: Brazil.
As an active lawyer in this continental country, I have chosen the role of trying to pass to lawyers and law students around the world the mechanisms of justice distribution that have been built since the arrival of the portuguese burocrats in the 16th century.
As you know, Brazil is the only coutry in all the Americas that was colonized by Portugal, and because of this we inherit most of the judicial and legal system created in Lisbon.
Our law doctrine also has much continental influence. The first law schools in the land were established five years after independence (1827), and it was common that most lawyers, until the turn of the XXth century, came from Portuguese universities.
Nowadays, ironically, we have an abundance of law faculties, 215 and counting, so much that it became a public problem, as the marketplace cannot stand so many new practitioners.
As a result, the order of attorneys in Brazil (OAB) submits the graduating students to an exam, in which they have their general and legal knownedge avaluated to see if they are up to the challenge of practicing law.
Overall, only 60 among the 215 courses are recomended by the Brazilian Bar (http://www.oab.org.br/noticia.asp?id=1464).
In the next topics, we will discuss relevant legal matters that take place in Brazil. So long.

Old photograf from my law school

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