Tax Relief for Books in Brazilian Tax Reform

between Effectiveness and the Symbolic Function of Tax Law

Abstract

This paper analyzes the legislative debate regarding taxes on the acquisition and importation of books in the Brazilian Tax Reform, specially discussing the Bill No. 3,887/2020, from the Executive Branch, which institutes the Contribution on Goods and Services (CBS). The paper establishes theoretical premises for evaluating legislative production through instruments of legisprudence, in particular the criteria for legislative decisions’ rational justification. Among these criteria, the paper emphasizes pragmatic and teleological rationality, which refer, respectively, to the efficacy and effectiveness of legislation in reaching the objectives stated by it. The paper differentiates, for purposes of legislative impact analysis, legislative activity’s instrumental function and symbolic function. The paper aims to demonstrate, based on empirical research on the population’s reading habits and the book industry’s performance, that the legislation that guaranteed tax exemption from social contributions for the acquisition of books was not instrumentally effective. However, it is argued that this legislation’s symbolic role could hinder proposals for Tax Reform that do not consider information asymmetry, availability bias, loss aversion and status quo bias of the population against changes in fiscal policy on the book industry.