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ACADEMIA Letters Crisis and growth: the importance of tax and fiscal compliance during and post pandemic João Salvador dos Neto When it comes to recurring costs in business, the one that demands the most importance is the so-called transaction cost. Several works were competent to elucidate what this occurrence consists of, however, an article stands out, not only in the referred task, but in the evolution of the company’s theory itself. In the work entitled “The Nature of Firm”, Prof. Ronald Coase demonstrated for what reasons the individual seeks to carry out his commercial activities instead of doing so by the so-called individual contracts. Seeking to define the nature of the company in relation to the market, permeating the idea of substitution margin, Prof. Coase observed that a company, externally, dynamically interacts with the market, however, internally, market operations do not affect, being the production directed by the entrepreneur through various exchange operations, which cause the so-called transaction costs.1 In this sense, transaction cost would be everything that is part of an exchange economy. For example, in a share purchase and sale transaction, in addition to the price to be paid for this security, the transaction will also incur the amount of commission due to the broker. In this sense, this amount owed to the broker is shown as a transaction cost. We can also bring the example of a certain consumer who decides to purchase a television set. In order to make the purchase, the cost that the consumer will face will not only be the value of the device, but also that corresponding to the choice of the product; travel to and from the store, if you decide to purchase on the spot; the time spent on the operation, etc. 1 COASE, Ronald. The Nature of Firm. The Firm, the market and the law. Chicago University Press. 1988. p. 6. Academia Letters, July 2021 ©2021 by the author — Open Access — Distributed under CC BY 4.0 Corresponding Author: João Salvador dos Neto, joaosrn@gmail.com Citation: Neto, J.S.D. (2021). Crisis and growth: the importance of tax and fiscal compliance during and post pandemic. Academia Letters, Article 2492. https://doi.org/10.20935/AL2492. 1 These costs that go beyond the cost that corresponds to the value of the television are called transaction costs It has been demonstrated the existence of a series of transaction costs faced by the entrepreneur in the market economy, such as, for example, the cost that exceeds the price of the good as a result of research and cost information, negotiation, maintenance of trade secrets, and policing and enforcement costs. And, to act in this environment, the entrepreneur needs to assume the transaction costs, and the business activity is efficient if these costs are minimized and interests maximized. Thus, it is inexcusable that entrepreneurs, especially micro and small, face challenges suggested by positive and negative incentives. And one of the great examples of incentives, if not the most significant of them, is the issue of taxation. In Brazil, given the normative and social peculiarities, this issue is very evident. The idea of taxation as an incentive to practice business is extremely pertinent, especially in a logic of constant battle in the search for the maximization of its profits. In fact, more than that, the quest for survival. How many companies face difficulties with major tax obligations (payment of taxes) and ancillary (declarations, bookkeeping, invoices), as well as labor and social security charges? Now, if such a complex tax system should already be the permanent agenda of the entrepreneur’s attention, how should it be then at the time of the greatest social and economic crisis in almost 100 years? Based on the assumptions that business activity, whatever its size, has inherent transaction costs, that tax incentives are inevitable, as well as the increasingly conflicting tax authorities and taxpayer interactions, it makes sense to seek a solution. way to survive and avoid the closing of companies, layoffs of employees, reduction of jobs, defaults with suppliers, customers and financial institutions, the imposition of informality and illegality, etc. The amount of the tax burden, excessive administrative bureaucracy, complex list of laws on tax matters and legal instability, are visible elements of the Brazilian Tax System and directly impact the health of business activity, which is why it deserves special attention. However, under penalty of the mistaken treatment that concerns only unfair expenses and impositions, the tax agenda of main and ancillary obligations must be treated strategically, as a necessary routine and consequent to the business choice. Therefore, the search for tax and fiscal adequacy through compliance is a very valuable tool, which provides legal certainty and support for the activity, in times of crisis or not. And, clearly, healthy business activity tends to grow, so compliance is very attractive to be in compliance with tax legislation and not allow, or avoid as much as possible, this is a negative incentive that defines failure. Academia Letters, July 2021 ©2021 by the author — Open Access — Distributed under CC BY 4.0 Corresponding Author: João Salvador dos Neto, joaosrn@gmail.com Citation: Neto, J.S.D. (2021). Crisis and growth: the importance of tax and fiscal compliance during and post pandemic. Academia Letters, Article 2492. https://doi.org/10.20935/AL2492. 2 We have that tax compliance reaches all aspects of the tax x taxpayer relationship, adapting from the tax framework to the fulfillment of the main and ancillary obligations. The compliance mechanism impacts business activity, adjusting your financial health, reality, culture, management and choices, shaping the operation, whether you are an individual microentrepreneur or a multinational economic group. Based on the establishment of routines, codes, structures, channels and, above all, the dissemination of the risk monitoring culture, tax compliance can provide the entrepreneur with peace of mind regarding the relationship with the Tax Authorities, which can reduce charges, executions and, if done together with tax planning, also reduce the incident burden. The fact is that we cannot forget, mainly because we recognize the specificities of the Tax System and the market economy, that using only tax compliance mechanisms is the only measure to be taken. As well as we do not disregard several of the problems imposed by the administration of this System and that the taxpayer can not intervene in anything, such as having an inverted mode compared to countries with strong economies, where income and assets and little consumption and production are taxed, contrary to our reality. However, in the face of this unstable and unattractive scenario, those who decide to undertake business activities, whatever their size, may have in tax compliance a great ally to maintain and grow, in quiet times, or pandemic times. Academia Letters, July 2021 ©2021 by the author — Open Access — Distributed under CC BY 4.0 Corresponding Author: João Salvador dos Neto, joaosrn@gmail.com Citation: Neto, J.S.D. (2021). Crisis and growth: the importance of tax and fiscal compliance during and post pandemic. Academia Letters, Article 2492. https://doi.org/10.20935/AL2492. 3