Brazil's Federal Revenue Service Turns to Social Media to Hunt down Tax Evaders

03/14/2017 - 12h17

Maintaining a particular lifestyle on social media while declaring a different lifestyle on one's tax return could cost Brazilian taxpayers a lot of money, since Brazil's Department of Federal Revenue has strengthened this sort of analysis in order to detect financial discrepancies.

Information obtained online may lead tax auditors to carry out more thorough investigations.

"The internet aids us. All investigations are carried out using risk analysis, which is based on an algorithm that filters keywords on the internet, establishing whether a profile fits specific criteria," said Flávio Vilela, the general coordinator of the department's investigations.

Such analysis enables the department to identify fake employees that companies use for tax fraud.

"Would the CEO of a company that brings in R$ 100 million (US$ 31.5 million) a year post pictures on social media where he's having a barbecue in the slums? The answer is no. So we use that person's contacts in order to arrive at the company's actual owner", Vilela explained.

According to Vilela, social media as well as other online information made available by notaries, are used to cross-check information.

Taxpayers who are caught omitting earnings on their tax returns can get slammed with a hefty fine (75% of the amount in taxes owed), plus an additional 27.5% tax levied on goods.

Translated by THOMAS MATHEWSON

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