Reciprocal Tax Immunity and Free Competition

still an Unsolved Question

Abstract

The present work starts from an analysis of State action in the economic order and the grounds of tax immunities for clarification of the rule laid down in Section 150, VI, “a” of the Brazilian Constitution of 1988. We conclude that, in light of the problems shown by the free competition principle, it is not possible a widespread extension of reciprocal tax immunity to state-owned companies that provide public services. A review of the debate requires the recognition of some clear boundaries to the tax immunity, according to that principle, perhaps not faced by the judicial precedents construed so far.