Brazilian coffee producing area information Brazilian coffee company is suspected of evading and profiting from tax evasion
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Prosecutors in the state of Minas Gerais said on Tuesday that Brazilian authorities raided coffee trading companies suspected of tax evasion and issued a number of arrest warrants to crack down on tax evasion, Reuters reported.
Coffee cooperatives, wholesalers, distributors and roasters in the Brazilian states of MinasGerais, Sao Paulo, Bahia and Espirito Santo were involved in the fraud, the Minas Gerais state prosecutor's office said in a statement. Their fraud totaled 1 billion reais ($178.75 million) in tax avoidance.
The coffee production of these four states accounts for more than 90% of Brazil's total coffee production. Minas Gerais is the largest coffee producer in Brazil, mainly producing Brazilian boutique Arabica coffee beans. Espiritu Santo is the main producer of Robusta varieties widely used in the instant coffee industry.
Tiago Visentini de Oliveira, a police officer responsible for coordinating the investigation of the plan, said at a news conference on Tuesday that roasters in Bahia used shell companies based in Sao Paulo to buy coffee beans in Minas Gerais and Esp í rito Santo to avoid paying taxes in some states and benefit from the price difference.
Brazil's tax system is very complex, especially the tax rate of Brazil's turnover tax (ICMS) varies from state to state, so each state has its own ICMS regulations, which allow many companies to evade taxes and profit from them.
Brazilian authorities did not disclose the names of the companies under investigation in this release. Court prosecutors say authorities are executing 35 arrest warrants in connection with the investigation, and the assets of suspects involved in the fraud will be frozen.
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