Tax Justice and Telecommunications Companies

The Case of Tax Debt in São Paulo and Brazil

‘Active debt’ — the unpaid taxes and penalties owed to the government — has reached R$2 trillion at the federal level and R$457.1 billion in the state of São Paulo. This represents more than one year of São Paulo’s total budget and, at the federal level, more than all the expenditures on health, education, and welfare, combined. It appears that some corporations are intentionally avoiding paying their taxes in the expectation that they will be granted amnesties, delivering big discounts on the final amounts owed.

With an average of two refinancing programs per year over the last 20 years, at the federal level alone, a "culture of non-payment" has been created that has normalized these debts.

This new report from CICTAR takes the example of three large telecommunications companies in Brazil which appear to be playing this game precisely. In the state of São Paulo, the three companies and their subsidiaries have accumulated R$11.1 billion in debts to the government, which in 2025 placed them amongst the biggest debtors: Tim in 2nd place with R$4.7 billion in debts, Vivo in 3rd with R$4.5 billion, and Claro in 33rd with R$1.9 billion.

These debts are allowed to go on in a scenario in which these companies receive millions in tax incentives and contracts, both at the state and federal levels.

Analyzing these companies’ reports, CICTAR has found three other tax loopholes that reduce even further the taxes they pay to the government: 1) the use of internal goodwill, which is the creation and purchase of shell companies within a corporate group solely to generate tax benefits; 2) the formation of billions of dollars in debt by Brazilian companies with companies in tax havens, draining their profitability; 3)the inclusion of digital materials in invoices without the clients detailed and explicit knowledge to offset tax obligations.

Our research poses the question: why are big telecoms providers, and other multinationals, being given a free pass on their debts, to the loss of billions in much needed revenue for state and federal services? It also provides specific policy recommendations to end the ‘culture of non-payment’ that has persisted in Brazil for decades.

The report was written by CICTAR with the consultative support of Sinafresp (union of tax auditors of the Sao Paulo revenue service) and Dieese (Inter-Union Department of Statistics and Socioeconomic Studies) and support from Public Services International, IJF (Fiscal Justice Institute), Fenat, Febrafite, IAF, Sindifisco-AM, Sindifisco-MG, Sindifisco-MS, Sinaffepi, Sindare and Afresp.

CICTAR wrote to representatives of Tim, Vivo, and Claro with a list of questions about our findings. At the time of publishing, none of the companies has responded.