Brazilian
Coffee Firms Face Indictment For Alleged Tax Fraud
April 12 - 2021
Coffee Geography Magazine
Authorities
in the state of Minas Gerais issued multiple arrest warrants during a surpise
raids as part of a probe to indict coffee companies accused of evading taxes in
Brazil according to the statement issued by the prosecutor’s office. According
to the government’s athorney, the state has lost a total of $178 million or 1
billion reais due to unclear tax practices by the coffee companies.
Brazil's Coffee Regions
The
investigation spans 39 cities in the states of Minas Gerais, Espirito Santo,
Sao Paulo and Parana, the statement said.
Minas
Gerais is Brazil’s No. 1 coffee producer, while Espirito Santo state leads in
the production of the robusta variety widely used by the instant coffee
industry.
Tiago
Vicentini de Oliveira, a police officer coordinating the task force that
investigated the scheme, said in a press conference that roasters in Parana
benefited from buying coffee in Minas and Espirito Santo using shell companies
based in Sao Paulo to avoid payment of certain state taxes.
The
Brazilian tax system is complex, particularly regarding the ICMS state tax
whose rate varies from state to state.
The
authorities did not name the companies being investigated.
Brazilian
authorities were serving 35 arrest warrants in connection with the probe, which
also involves freezing assets of the suspected parties, the prosecutors said.