The federal government of Brazil created a program dubbed Simples Nacional under Micro and Small Companies Act in 2006. This program is a simplified tax system that minimizes tax payable by micro and small companies.
With a simple tax system, entrepreneurs focus their mind on growth and development of their organizations, which gives the businesses a better chance of survival. This business survival was recently proved by the Brazilian Micro and Small Business Support Service (SEBRAE) through a survey that was conducted to show the survival rates for businesses in relation to adopting the Simples program. The results showed that in 10 companies that use this program, eight of them reach the second year mark in business. On the contrary, only four of 10 business get past two years without the program. The survey also showed a 64 percent increase in those opposing the program from 2012 to last year. This increase was brought about by the growth of the Individual Microentrepreneur (MEI), which went up by 150 percent. Nearly 67 percent of those not qualified for the program noted that they would like to join. A third of companies in the program indicated that Tax Replacement (ST) was harming them. January 2018 will see a change in the income bracket for Simples Nacional qualification.
Importance of Auditing
In his recent article, Flavio Maluf explained the importance of auditing to any business. Auditing involves scrutinizing a firm’s financial documents, checking on integrity, accuracy, and credibility. Endeavor Brasil notes that this process is essential to prove a company’s trustworthiness to the main players in the business, such as shareholders. It is also critical for business survival in a competitive market.
Auditing takes two forms: internal and external auditing. Internal auditing is whereby a team is employed by the company and tasked with responsibilities to help the administration in decision making. The team is also expected to analyze the internal controls of the company. External auditors report is used by outsiders involved in the business, such as partners and banks among others.
About Flavio Maluf
Flavio Maluf is the senior leader of Eucatex Group, a firm that specializes in the production and selling of furniture and construction products made from eucalyptus. Flavio’s maiden job was in the trade department in 1987. He served in other capacities before being named the president.