Illegal market causes losses of almost R$ 337 billion in Brazil

Practices of the so-called illegal market caused a loss of R$ 336.8 billion to Brazil in 2021, estimates a survey released this Thursday (4) by business entities in Rio de Janeiro.

The calculation includes the effects of actions such as smuggling, piracy, unfair competition due to tax fraud, tax evasion and theft of public services.

Of the total amount, R$ 95 billion refer to unpaid taxes that could be reversed in the welfare of society, indicates the technical note, which calls attention to the existence of an “illegal Brazil”.

The survey was produced in a partnership between ACRJ (Commercial Association of Rio de Janeiro), Fecomércio RJ (Federation of Commerce of Goods, Services and Tourism of the State of Rio de Janeiro) and Firjan (Federation of Industries of the State of Rio de Janeiro) .

At the beginning of the year, the entities created a working group that analyzed the topic. The initiative consolidated data that measure the impact of the illegal market on 16 economic activities, in addition to electricity and water supply services, which are part of the area of infrastructure.

According to the study, the loss of R$ 336.8 billion is equivalent to the GDP (Gross Domestic Product) of Bahia and Sergipe added. The entities also estimate that the illegal market hampered the creation of 535,700 formal jobs in the country.

“The results presented by the GT [grupo de trabalho] are extremely important, not only for our city, but for the state of Rio and for the country”, said the president of ACRJ, José Antonio do Nascimento Brito.

“It is necessary to keep in mind that these figures interfere in people’s lives. With adequate public policies and union and participation of the productive sector and the authorities, this scenario can and must be reversed, generating gains for all”, said the president of Fecomércio RJ , Antonio Florencio de Queiroz Junior.

Among the economic activities evaluated, the study points to losses caused by the illegal market in the order of R$ 60 billion in clothing, R$ 26 billion in fuel and R$ 21 billion in cosmetics.

Categories classified as alcoholic beverages (R$ 17.6 billion), agricultural pesticides (R$ 15.1 billion), pay TV (R$ 15 billion) and cigarettes (R$ 13.3 billion) come next.

In infrastructure services, the working group indicated that costs with energy theft, popularly called “cats”, reached the mark of R$ 6.5 billion last year.

The work points out that, according to Aneel (National Electric Energy Agency), the rate of non-technical losses –such as energy theft– is 15% in Brazil. In the North region, the value exceeds 50%.

The entities also claim that, according to data from Abradee (Brazilian Association of Electricity Distributors), the amount of stolen electricity in Brazil would be enough to supply the state of Rio de Janeiro for a year.

The working group also estimated at R$ 20 billion the cost caused by illegal connections in the water supply network in the country in 2021.

The amount of water stolen per year in Brazil is equivalent to 2.4 times the total volume of the Cantareira System, in São Paulo, say those responsible for the survey.

For business entities, the fight against illegality requires coordinated actions between the Legislative, Executive and Judiciary.

“These are subtracted resources, taxes not collected and jobs that are not created”, stated the president of Firjan, Eduardo Eugenio Gouvêa Vieira.

“It is important to show the socioeconomic damages of this practice in the country, and to demand coordinated actions from all spheres of government to combat this illegality”, he added.
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