Fear of Brazil’s IRS Prevents Companies from Investing in Culture

Of Brazil’s 200 thousand firms that earn real profits and could invest in culture through a legal way for doing so, the Rouanet Law, only 1,500 avail themselves of the opportunity. These data come from the Ministry of Culture.

According to Minister Gilberto Gil, entrepreneurs are reluctant to make use of the law, which provides fiscal incentives in exchange for cultural sponsorship, in order not to expose their balance sheets to the Federal Revenue agency.


“The culture of tax evasion inhibits the culture of investment in culture, and so forth. This involves a complex political engineering, which will only be resolved when everybody’s conscience begins to change,” the Minister affirmed.


In his view, the firms, especially the ones owned by the State, are preferring to invest in social projects instead of culture, for the sake of greater visibility.


“Motivated by the theme of social responsibility, firms have chosen to invest in social or athletic projects. But they fail to realize that cultural projects also represent a form of social inclusion.”


Gil was in Rio to participate in a meeting with entrepreneurs, performers, and theatrical producers. The debate, at the headquarters of the Federation of Industries of Rio de Janeiro (Firjan), was to try to discover ways to lure investments back to theatrical productions in the city.


According to data from the Rio Association of Theatrical Producers, investments were halved in the last two years, and Rio de Janeiro was the state least benefited last year by funding from State as well as private enterprises.


Once more the Minister acknowledged that the share of the Federal Budget allotted to culture is insufficient to finance projects.


The Ministry of Culture receives only 0.4% of the total budget, despite the fact that the UNESCO (United Nations Education, Science, and Culture Organization) recommends that at least 1% of each country’s budget be set aside for culture.


Without wanting to cite figures, Gil said that “the economic area of the government has already promised that the resources for next year will be greater.”


In the National Congress a bill to amend the Constitution is being discussed, increasing the share of the Federal Budget allotted to culture to 2%.


The Rouanet Law, approved in 1991, enables projects authorized by the National Commission of Cultural Incentives (CNIC) to gain sponsorship and donations from firms and individuals, who are permitted to deduct at least part of the amount from what they owe in federal income tax.


Agência Brasil

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