Unfair tax competition: fiscal war between the Federation

Abstract

The fundamental objectives of the Brazilian Federal Republic eradication and marginalization of poverty and reducing social and regional inequalities (Art. 3, III and Art. 170, VII, CF / 88). It is intrinsic to the federal pact, housed in constitutional, political, administrative and financial autonomy of the member federation. In the exercise of its powers, can the federal, state and local governments offer incentives in the form of tax incentives in order to instigate the local economy and the socio-economic development (Art. 151, I, CF / 88). In Brazil, the possibility of state intervention is a constitutional proposal. Free enterprise remains a fundamental principle of economic order (Art. 1, IV, 170, CF / 88) and engages in interventional limit this activity. The intervention is always possible when there is the need to submit economic activities to constitutional rules (Art. 170, CF / 1988). Given this panorama, we discuss the possibility of granting tax incentives for the members of the federation to be used as instruments for the so-called "war tax" and, consequently, its constitutionality or not. Apart from this aspect brings to the fore the consequences of this intervention, if incentives in the economic field; among them to affect the constitutional legal-economic system, more specifically the disrespect to free competition.