The Nucleus for Fiscal Studies (NEF) of FGV’s Sao Paulo Law School (Direito SP) met with experts on the topic of “Neurobusiness, neuroarchitecture, taxation and normative design” on May 9.

Robson Gonçalves, Coordinator of the Neurobusiness program of FGV Management Sao Paulo, explains that efforts to understand various phenomena only by their rational aspects significantly limit comprehension of the subject. “Depending on how a rule is presented, the impacts on citizens may be different. This may explain why some laws take and others don’t”.

Based on this premise, the expert argues that political persuasion on the subject is essential for its acceptance and approval. “The reform bill cannot leave the impression of diminishing powers in political groups, since, based on that irrational aspect, one of the most human traits is aversion to loss”.

Andrea de Paiva, also from FGV Management SP, introduced the nudge concept in normative design. “Nudge is simply a voluntary and unconscious shift in behavior caused by a subtle aspect of the rule”, said the expert, exemplifying the stratagem with the choice of the right words that somehow would contribute to improve compliance with the rule.

Direito SP researcher Gustavo Vettori steered the debate towards tax reform by expanding the networks in international economy, which broke the tangible aspect of the goods, which is the basis for imposing income taxes.

“This is a paradigm shift that creates various issues for income taxation, especially in Brazil, where the taxation system is unable to create new forms of business and added value”.

Vettori also points out that these transformations add to the perception of loss aversion among the federative entities, which fear losing the allocation of competence in any tax reform.