Simplicity is not Simple

the Principle of Simplicity in Tax Law

Abstract

This article examines the principle of simplicity, recently incorporated explicitly into the Brazilian Constitutional Tax System through Constitutional Amendment No. 132/2023, which enacted the Consumption Tax Reform. First, it investigates the substantive content of the principle in order to identify the ideal state of affairs it seeks to achieve, thereby addressing the multidimensional vagueness that characterizes the notion of simplicity. Second, it analyzes the implications of the principle’s explicit constitutional recognition for its interpretation and application, seeking to determine whether its express incorporation alters the normative effectiveness of the rule. Third, it examines the relationship between the principle of simplicity and the use of legal devices such as presumptions and legal fictions by the lawmaker, which, to varying degrees, depart from factual reality or from the legal nature of the relevant transactions in pursuit of objectives considered sufficient to justify such departures from the truth.