Brazil’s Federal Revenue Service is expanding its network of specialised tax enforcement units to improve the efficiency and efficacy of audits of large firms and high-net-worth individuals.
According to local media outlet InfoMoney, the project expands on successful models in São Paulo and Rio de Janeiro, targeting financial institutions and the energy sector, respectively.
A national framework for sector-specific oversight
The proposed plan includes creating four new specialist tax enforcement police stations in three more state capitals.
These will add to the two units that already make up the federal government and expand the coverage of industry-wide regulatory supervision across the country.
A new office will also be established in Belo Horizonte, concentrating only on the high-income bracket, and the João Pessoa office will focus on industries that will face tighter regulation, including beverages and tobacco.
At present, the majority of tax offices, in a general sense, serve regional taxpayers.
The new model aims to change this by concentrating both expertise and resources in units focused on economic sectors, with auditors trained to serve a specific sector economy.
Deployment is dependent on administrative restructuring
The strategic plan has been under development for more than a year, but implementation was put on hold pending information needed for changes to internal IRS jobs to accommodate the new plan.
Such changes relate to a provisional measure (MP) which introduces more general tax changes, such as those of the taxation of financial investments and corporations.
Importantly, the MP also allows for bonus roles to be made executive commissioned functions—an administrative change needed to deploy the new specialised units.
The reclassification would generate, in turn, an estimated expense of R$6.9 million in 2025 and R$12.9 million in 2026.
The Federal Revenue Service does not have a legally and technically sound basis to establish the planned national echelon offices without such reorganisation.
Detailed breakdown of new units
The expansion will adhere to a carefully defined division of responsibilities across the country, with each unit assigned certain sectors based on local economic strengths and regulatory goals.
• Rio de Janeiro focuses on oil, gas, mining, fuels, and power.
• São Paulo I: Automobiles, telephones, transportation, and construction.
• São Paulo II: Existing financial institutions.
• Manaus focuses on water, sewage, electronics, health, and pharmaceutical industries. • Salvador produces chemicals, paper, pulp, footwear, and capital goods.
• Florianópolis includes agriculture, livestock, textiles, and supermarkets. • Belo Horizonte attracts high-net-worth individuals.
• João Pessoa: Sectors under special monitoring, including biodiesel, cigarettes, and beverages.
Each unit will have a national reach, allowing the IRS to standardise methods and improve the quality of inspections across multiple industries.
Enhancing tax collection and compliance
The Federal Revenue Service will seek to leverage compliance and the collection of taxes owed by large economic players through tax enforcement directed by industry-specific expertise.
This centralised strategy is intended to eliminate inefficiencies created by generalist tax offices and help make sure that large corporations and wealthy individuals are subject to greater, consistent and knowledgeable scrutiny.
The development of the specialised police stations is a feature of the new Brazilian analysis of tax administration, where their past geographically focused response is transitioning to one that is functionally specialised.
If implemented successfully, the model can assist in revenue collection, taxpayer service, and accountability in the key sectors of the economy.
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