As the president of Eucatex, Flavio Maluf has become one of the most important businessmen in the country of Brazil. After having inherited the company from his father, he was able to grow it from a small paper manufacturing firm into one of the most important multi-industry manufacturing conglomerates in the country. Today, Eucatex is involved in everything from the production of automotive parts to the fabrication of fine furniture and interior finishing.
But spending decades at the helm of one of the most important manufacturing companies in the country has given Flavio Maluf a front row seat to witness the horrors of confiscatory taxation policies. Maluf says that over taxation is almost never meant to achieve the goals that are attributed to it by politicians. He says that this is easy to see because over taxation almost always has the effect of driving the most vulnerable small businesses into the ground while giving the largest corporations huge competitive advantages. Visit dino.com to learn more about Maluf.
One way in which this occurs is by requiring companies to spend massive amounts of money on expensive accounting firms and law firms in order to devise ways to successfully offshore their operations in order to evade taxes. While the largest companies in the country can often afford to make these moves, many of their smaller competitors are simply unable to afford to spend the money necessary to complete the offshoring of operations. This has a doubly positive benefit over the long term for the large corporations that are able to complete the offshoring process. The first is that they ultimately end up paying far less taxes over the long term. The second is that their competition is often driven completely out of business, leaving them with a far stronger grip over the market in which they are participating.
Maluf says that driving small businesses out of the marketplace is one of the worst moves that one could possibly make for a national economy. Small businesses not only provide a great number of jobs, they also are able to compete and keep prices low for the consumer. Maluf advocates major tax breaks for small business in order to keep Brazil’s economy thriving.