back to article Cisco Brazil hit by massive police raid

Cisco offices in Brazil were raided yesterday and executives arrested during a massive raid against alleged illegal avoidance of import duties. Six hundred and fifty police and tax officers used 93 search warrants at Cisco offices and private homes. Police arrested 40 people, but no names were released. Investigators also …

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  1. Anonymous Coward
    Anonymous Coward

    Using the RIAA scalar

    Well using the RIAA punishment scalar $833 million is lost revenue means the fine should be ($220,000/$20)*833,000,000 = $9163000000000.

    $9 trillion.

    Hey, if inflated penalties are good for copyright infringing people then why not for import duty evading companies? They were very fast routers after all.

  2. Greg

    Hang on...

    Products worth $500m should have generated $833m in tax?? No wonder they were dodging it!

  3. Neil Barnes Silver badge

    $833 million tax for $500 million cost?

    That's a hell of a lot of tax, even for Brasilian IT.

    I recall they changed the rules a few years back, but I don't recall the taxes being *quite* that high!

  4. Anonymous Coward
    Anonymous Coward

    Ouch!

    $833M tax from goods worth $500M+. Worse tax than the UK and I never thought I'd say that!!!!

  5. leslie
    Paris Hilton

    how much tax?

    worth at least $500m that have been shipped into Brazil from Panama, the Bahamas, and the British Virgin Islands.

    These goods should have generated $833m in tax to the Brazilian exchequer.{/quote}

    how can the tax be more than the sum ?

    no wonder they tried to avoid paying it........

  6. Piers

    Erm...

    I'm probably about to get quite spectacularly corrected, but how can $500m worth of goods generate $833m of tax? Surely that's 166%.

  7. Anonymous Coward
    Black Helicopters

    So as a result...

    So the local authorities rousted Cisco & seized some toys. Although it's entirely possible that Cisco is in the wrong here, it seems more likely that a third-world government saw an opportunity for some quick cash. Of course in the long run, if Cisco decides that doing business in Brazil is too much of a hassle and pulls out, it'd be quite the Pyrric victory for Brazilian officials. Many millions of $ worth of goods, quite a nice heist, but compared to long-term revenue from Cisco and jobs created, probably a drop in the bucket. Overall, probably a pretty stupid move by some despot.

  8. Rob Sked
    Coat

    RE: Erm...

    Tis easy to figure out.

    They are using the Microsoft pricing system!

  9. Mark Finn

    Brazillian tax structures

    Sounds about right for Brazil actually. Tax there is just insane. Without exaggeration, a simple commercial purchase can end up owing tax to upwards of 20 different local, state and national agencies, and cumulative taxes well in excess of 100% on imported "Luxuries" (including all forms of IT gear) are far from uncommon.

    So, how does anyone do business in Brazil then? Simply put, one of the two reasons taxes are so high is that 90% plus of businesses simply do not pay them. Cisco is in this case being roped in as they can afford to pay and will, in doing so, clear the tax burden for every other business in operation for a few months.

    Brazil is one of those special states that discovered that by not putting obvious barriers between the regular Joe-screwed-over-Smith and the Joe-government-job-Smith they can get the populace to keep playing along in hopes of someone in their family landing a government post and retiring in a decade with enough funds and ever increasing pension to keep the entire family in luxury for a full generation or two. (Beat that for a perfectly logical run-on sentence if you can).

    (I hate Icons)

  10. Anonymous Coward
    Black Helicopters

    Title

    That's about right. And that is only import duties, mind you. Here in Brazil we pay as much taxes as in Germany, and receive a worse return (public services, etc) than in India. Where does all the money go? Guess.

    It's very, very sad. Tech doesn't come into the country without some way of evading the taxes, else if something costs $500 in the US for example, legally buying the final consumer will cash out 6-7 times that amount in between taxes and currency exchange.

  11. Pascal Monett Silver badge

    Brazil ? Despot ?

    Sorry, but Brazil happens to be the 4th largest democracy on the planet.

    So it is not a question of "a pretty stupid move by some despot", but more likely "a pretty stupid move by some moronic administrative entity".

  12. Anonymous Coward
    Anonymous Coward

    Not an unusual level of taxation

    http://www.petrolprices.com/fuel-tax.html

    shows that the tax element on petrol in the UK (63.7 out of 95.1) is 203% of the total price, and that includes retailer markup. Can't be bothered to find refinery gate prices.

    NB I'm not saying this level of tax on fuel is a good or bad thing.

  13. Name
    Alert

    Oh GOD..

    I'm brazilian and i had to register here just to explain some stuff...with a bad source everything gets mixed up and some people that don't know what they're saying just keep saying non-sense.

    1 - Yes, tax here are high, but OF COURSE THAT 500mi won't make it 833mi in taxes. In this 833 milions it's included: TAXES, but over the 5 years that went by (meaning: if they didn't pay the tax in 2002, for example, in 2007 the present value it's not the same...), and the FINE as well.

    So, 833mi = FINE + TAXES + "CORRECTION" (don't know if this words existis in english) of the Present Value over 5 years

    Don't come and say that Cisco is right, it's just stupid, you know why?

    This didn't started yesterday, when the company went to Brazil they knew how much they would have to pay with taxes. It's not "Let's go to Brazil...5 months go by...OMG LOOK AT THIS TAX". They knew it. If they think it's too much, they can go anywhere else.

    The other companies pay it, so they were just trying to be the smart ones.

  14. Anonymous Coward
    Alert

    Brazilian Taxes

    Hey, those $833m are about taxes, fines and interest, not only taxes!

  15. anthony bingham

    Cisco Kid rides again ...

    But don't forget "the good the bad and the Brazilian" I lived there for four years and discovered very quickly that corruption is rife and if you wish to survive commercially or just plain ol' Pleb. stuff you need to be seriously savvy and fire proof your Arse ( the right kind of "legal" support helps big time ) So I am really suprised that Cisco have provoked their chosen workplace 'cos the Body Politic do Brazil enjoys nothing better than a tasty American Pie !

  16. kain preacher Silver badge

    US TAX LAW

    think thats bad Here state side they can impose %33 fine on you for every year you dont pay. So those fines would kill you. Of course the IRS isable to collct taxes from god,

  17. anthony bingham

    @kain preacher

    Dead Right! but the Heavenly currency is da Shekel my boy ; we could offer up the occasional bio- Mass for our Brazilian brothers !!

  18. J
    Pirate

    Another Brazilian 2c

    Even if some fellow Brazilian mentioned above that this is multiple years + fine + etc., it would not surprise me if the $833 million were indeed just taxes...

    Mind you, a bit less than a couple years ago I went there to visit my family as usual, and brought a 4 Gig iPod nano for my sister. There at the time, the ONE Gig nano was priced at about the equivalent of $400 (yes, American dollars) at the time. I didn't even have the nerve to look up the price of the 4Gig one... Laptops usually cost two to three times the US price, easily, more if it is more of a top pf the line machine. No wonder the grey (and pirate, for software) market flourishes like mushrooms down there (even if mushrooms don't really have flowers...).

  19. Anonymous Coward
    Heart

    long live Hugo Chavez

    So why the chuff arent the brazillians voting in a 'Hugo Chavez' who will take all these extortionate taxes and convert them into food for the gadzillions of starving Brazillians?

    I guess they are too busy lining their own pockets .. shame on you Brazil.

  20. David
    Unhappy

    Brazilian Taxes = Ridiculous!!!

    Brazilian taxes on electronics devices are simply preposterous.

    They're revolting. They're insane. Anyone who says otherwise is insane. It's as simple as that.

    Currently, 1.8 reais buys US$1,00, one dollar, but if you want one dollar of ELECTRONICS, then you'll very easily pay R$6,00 for every dollar. It's as simple as that, and it's outrageous.

    I don't blame CISCO. Brazil sucks for electronics. Food is cheap, though... but anything else you might need for your job, like electronics or electrical equipment, isn't. It's a dumb man's land. Only cheap, simple, bad quality stuff really thrives in Brazil. Noone knows the difference.

    Terrible, terrible.

    I'm Brazilian, BTW.

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