Tax management and competitiveness in the production chain of dog and cat food in the State of São Paulo

Abstract

This work aimed to analyze and understand the taxation of dog and cat food and to calculate and compare its tax burden on the production chain. Tax management strategies are relevant and influence business competitiveness. The National Tax System (STN) has a higher concentration on the taxation of the bases of goods and services if compared to the average of the countries of the Organization for Economic Cooperation and Development (OECD). Governments seek to maintain their collections through tax policies, with the need for reforms in various sectors being constantly pointed out given the significant tax burden existing in the country. This research was developed based on bibliographic, documental and tax legislation surveys and is a qualitative, descriptive and exploratory approach. A simulation of the tax burden along the production chain of pet food was prepared based on the pertinent legislation, obtaining a tax burden percentage in the industry of 52.63%, on the distributor of 6.61% and on the pet shop of 7.30%. In 2016, the average national tax burden was 32.38% of Gross Domestic Product (GDP) and increased in the following two years, while comparing with the simulation prepared, it was obtained that the consumer paid when buying pet food, 41.86% of taxes, accumulated along the production chain. It was noted that pet food taxation is 9.48 p.p. higher than the national average for that year. The taxation of pet food has been pointed out constantly by entrepreneurs and entities in the sector as excessive and one of the main obstacles to development. Moreover, it is noticeable that the government still does not recognize the innumerable benefits brought by these pets to society, given the constant increases in the tax burden of these products.