Monetary Correction of Tax Credits

an Analysis on the Use of the SELIC Rate and the IGP-M

Abstract

The present paper aims to analyze the use of monetary restatement in tax credits. Starting from a historical contextualization, it is studied the emergence of the monetary restatement institute during the time of Brazilian hyperinflation, what were the grounds for its use and the consequences of its indiscriminate use. Then, the assumptions that must be respected by the legislator when choosing an index in order to be used as a parameter for monetary restatement are sought. Finally, it is verified whether two indexes adopted for tax credits in Brazil, the SELIC rate and the IGP-M, are adequate to the fixed assumptions, concluding that they are inadequate.