Study points out inconsistencies in estimates of the Union's fiscal risk

Tax disputes being processed in higher courts may represent a different risk to public accounts than that presented by the government in the last ten years.

This is the conclusion of a study by Insper's Taxation Center, which analyzed the ARFs (Tax Risk Annexes) of the LDOs (Budget Guidelines Laws) between 2016 and 2026.

For researchers, the way in which the Union calculates the impact of these actions lacks transparency, presents methodological inconsistencies and prevents knowing precisely the size of the liability that could reach the public coffers.

ARFs are documents used by the federal government to estimate how much unfavorable decisions in judgments by the STF (Supreme Federal Court) and the STJ (Superior Court of Justice) may cost the Union.

These estimates also serve as an argument for the AGU (Attorney General's Office) in actions with a large fiscal impact, such as requests to modulate the effects of judicial decisions - which makes the inaccuracy even more worrying.

Numbers help explain the scale of the problem. According to the survey, fiscal risks related to tax disputes reached R$1.5 trillion in 2020, equivalent to 20% of GDP (Gross Domestic Product).

Five years later, the estimate fell to R$729.9 billion, or 6% of GDP. The study highlights, however, that the reduction does not necessarily mean that tax disputes have decreased.

More than the variation in values, what draws researchers' attention is the lack of clarity about how these numbers are produced.

Throughout the historical series, Insper identified billion-dollar changes in estimates without public justification, processes without any estimated value and methodologies that could not even be verified by researchers.

"Given the limited data available in the ARFs, which do not provide justifications for changes in value, it was not possible to identify the causes for variations in the value attributed to the impact estimates of the same topic. If the calculation methodology cannot be concretely identified, the disclosure of values in the ARF compromises the reliability of the information provided", says the text.

When comparing the 2019 and 2020 LDOs, the researchers found an increase of approximately R$508 billion in the estimated fiscal risk.

According to the study, only a portion of this growth can be explained by the inclusion of new processes. Most of it resulted from the review of the values attributed to actions that were already part of the document.

One of the examples is the discussion about the exclusion of ICMS (Tax on the Circulation of Goods and Services) from the calculation basis of PIS (Social Integration Program) and Cofins (Contribution to the Financing of Social Security).

In just one year, the estimate jumped from R$101.7 billion to R$229 billion. The discussion involving PIS and Cofins tax credits went from R$250 billion to R$316 billion.

Even with increases of this magnitude, the study states that the government did not explain the revisions.

Another point raised is the growth in the number of processes classified as "not available" tax impact.

While the 2021 LDO recorded just one case without an estimate, the number jumped to 22 themes in 2022, remained at 15 in 2023, 20 in 2024, 9 in 2025 and rose again to 16 in the 2026 LDO.

"The omission of such reasons, therefore, not only compromises transparency, but also constitutes non-compliance with the AGU standard. (...) In the entire historical series analyzed, information about the methodology and database considered in the calculation of impact estimates are not proactively disclosed in the ARF, so that access to such databases depends on the transmission of requests for access to information", highlights the study.

When requesting documents from the RFB (Federal Revenue of Brazil) through the LAI (Access to Information Law), the researchers claim to have found other problems.

In some cases, the estimates were prepared using a methodology that was still "in the investigation phase". In others, there were no documents that explained the calculations or the technical notes used dealt with topics other than those listed by the government itself.

The report concludes that these inconsistencies prevent reliably assessing the fiscal risks associated with the country's main tax disputes and advocates greater transparency regarding the databases, criteria and methodologies used by the Federal Revenue Service in preparing the estimates.

The report contacted the AGU and the Federal Revenue Service and is awaiting positioning. The space remains open.

Source: CNN