TAX EXEMPTIONS LIMITATIONS ON STATE ACTION

Abstract

This article sought to analyze the way in which taxation has been frequently used in Brazil as a method of inducing economic activities, regulating and managing the economy of the most varied business niches. Tax benefits bring about a reduction or eliminate, directly or indirectly, the tax burden. Failure to observe tax principles in the application of exemptions or tax benefits generates a revenue deficit or even a lack of equality in the economic market. Those who are affected by taxation in its broad possibility of fiscal modulation are affected in a non-uniform manner, with differentiation between taxpayers and a breach of the principle of equality with regard to the limitations of state action. According to the traditional doctrinal mechanisms for controlling equality when it comes to taxes, other principles reflect the historical difference in the social classes of taxpayers, the current policy and other factors, making sectors more advantageous for their exploitation, with tax planning being inherent and attentive to social changes derived from the tax capacity, and tax exemption incurs several other benefits because they have the same purposes for taxpayers. This article describes the criteria for controlling social tax inequalities generated by the state when taxing and interfering in the economy.