October 27, 2006

Brazilian government faces challenge over proprietary tax software

Author: Bruce Byfield

The Free Software Foundation - Latin America (FSFLA) is campaigning against the Brazilian government's regulations that some citizens must use non-free software for paying taxes. Referring to the software as "Softwares Impostos," a term that puns in Portuguese on "taxes" and "imposed," FSFLA has launched a letter-writing campaign against the requirement, arguing that it is both contrary to current social policies and a violation of the Brazilian constitution.

Complaints about government services that are accessible only through proprietary software are increasingly common around the world. For instance, in the United States, the Federal Emergency Management Agency's Web site at one time would only accept disaster claims from survivors of Hurricane Katrina via Windows and Internet Explorer. Similarly, last spring's online census in Canada was accessible only through Windows or Mac OS X. What is unusual about the Brazilian situation is that it is unfolding against a background of increasing acceptance of free software, and that constitutional arguments may exist against it.

According to Alexandre Oliva, a Red Hat contractor and secretary for the FSFLA, the Brazilian government makes a number of taxation programs based on Windows and Sun Java 1.4 available for citizens. The most widely used of these programs is IRPF2006, which is developed by SERPRO S.A., Brazil's official federal data processing service and probably the largest provider of e-services in Brazil. Because hardcopy tax forms do not contain the necessary listings, many higher-income Brazilian taxpayers are required to use IRPF2006 for calculating and paying taxes. Those required to use the software include anybody with an income over R$100,000 ($47,000), or R$69840 (32,000) from a rural business, or with profits from sales of goods, rights, stocks, or futures, or a rural business.

IRPF2006 was originally Windows-only, but a Java version has been available since 2004. "The Java version was meant to be multi-platform," Oliva says, but "it happens to rely on internal classes that are not part of the Java specification, and that are only present in Sun's implementations and derived versions. Clean-room free software implementations shouldn't have to provide these classes: programs that directly refer to such internal implementation classes are not Java-compliant programs." Oliva adds that this dependency runs counter to the Receita Federal (Internal Revenue)'s own specifications, which require only Java 1.4 specifications, and not Sun's version of Java in particular.

A growing background of free software

In many countries, the fact that governments enforce the use of proprietary software remains a minor issue. However, Brazil is seeing a growing tendency for public policy to consider or even favor free software. "Few people are using only free software," says Omar Kaminski, a lawyer who represents Brazil in the GPLv3 process, "but it's a strong tendency in this government." According to Lucio Teles, a professor of education at the University of Brazil, free software is increasingly becoming the norm in Brazilian education. Similarly, Oliva notes that the number of businesses releasing free software is on the rise.

Moreover, many of Brazil's cities and 27 states have passed laws to encourage the adaptation of free software. The state of Paraná, for example, is currently developing a free license for all government-issued software. Such laws and policies are intended primarily to encourage the building of a computer infrastructure in a country that still has many pockets of extreme poverty. Admittedly, the constitutionality of such laws and policies is currently being questioned in the state of Rio Grande do Sul, but the momentum of free software appears to be only slowed, not checked, by such opposition. "The discussion is growing fast," Kaminski says.

According to Kaminski, the Conselho Nacional de Justiça (National Council of Justice) advocates that the federal judiciary use free software, and Ellen Gracie Northfleet, the president of the Supreme Court, is at least favorably inclined towards free software. In addition, Oliva says, Computadores para Todos (Computers for Everyone), the federal government program to enable those on low incomes to buy computers, has encouraged free software by offering tax breaks to manufacturers that sell their computers beneath a set price and makes low interest loans available to people who buy computers that are loaded only with free software.

Against this background, the insistence that Brazilians use proprietary software to interact with the government seems to run contrary to the prevailing tendencies in government policies.

Constitutional arguments

Perhaps even more importantly, Oliva says, strong constitutional arguments can be made against the Brazilian government's requirements. Although the legitimacy of many of these arguments depends on how the principles of free software are legally interpreted as interacting with copyright law and a marketplace economy, imposing the taxation software may be a straightforward violation of at least two articles of the Brazilian constitution.

Under Article 37, governments at all levels in Brazil are required to abide by several principles. These principles include "lawfulness," or the imposing of obligations upon citizens only by passing laws, and "impersonality," or impartiality towards individuals and corporations. Since no law has been passed that requires the use of the particular software, the Brazilian government may be violating the principle of lawfulness. Similarly, by requiring that only some citizens use the software and by using software manufactured by a particular company, the Brazilian government may also be violating the principle of impersonality. Oliva suggests that the argument can be taken even further because the additional costs required to upgrade or modify proprietary software also amount to partiality toward the software manufacturer -- to say nothing of being a hidden cost that the tender process does not take into account.

Similarly, Article 170 of the constitution lists a series of economic rights for Brazilians that any government actions must respect. These include free market competition, the defence of consumers, the reduction of regional and social inequalities, and favorable treatment for small businesses with headquarters in Brazil. The government's insistence that citizens use proprietary software, whose manufacturers are largely located outside Brazil, and whose price is prohibitive for many citizens, can be argued to violate all these principles.

Article 170 also states that "Free exercise of any economic activity is ensured to everyone, regardless of any government authorization, except in the cases set forth by law." Assuming that paying taxes is defined as an economic activity under Brazilian law, then the government's insistence on the software amounts to a violation of this assurance and is therefore illegal.

Unlike free software advocates in other countries, the FSFLA in Brazil does not have to base its opposition to pro-proprietary policies entirely on moral arguments -- although such arguments are hardly in short supply on the FSFLA Web site. Instead, in Brazil, the opposition is in the possibly unique position of having straightforward constitutional arguments from which to argue. The FSFLA continues to make these arguments, both about the taxation software and the pro-free software laws in Rio Grande do Sul, and they appear to be strong ones.

"I think it's a good and new way to interpret the federal constitution," Kaminski says. "As a new way to understand liberty, from the view of the Internet users, or free software users in this case, it's a great way to make the e-democracy to flow."

Whether the novel constitutional arguments will be upheld is still uncertain. For all the advances that free software has made in Brazil, proprietary software continues to have a firm foothold in government -- for example, Brazil's electronic ballots require Windows CE. As a result, the implications of the arguments are sweeping enough that they are unlikely to be accepted without careful scrutiny. However, should they fail, the FSFLA has one final argument. The software, Oliva notes, is unaccompanied by a license -- which is, in itself, illegal. "Per Brazilian law, using software requires a license or a proof of purchase," Oliva says. "Therefore, its use by any taxpayer is a copyright violation. When taxpayers are required to use such software to be able to comply with their tax obligations, the government is demanding citizens break the law.

"This is quite unfortunate," he adds with deceptive mildness.

Bruce Byfield is a course designer and instructor, and a computer journalist who writes regularly for NewsForge, Linux.com and IT Manager's Journal.

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