A word from the President

Leia em Portugues

ABEL: Half a Century of History

Osmar Roncolato Pinho

ABEL reaches its 50th anniversary, completed today, with many victories, but still with important obstacles to overcome. The main obstacle is to get leasing to be truly recognized as an institute so that it can participate significantly and isonomically in the gross capital formation for all segments of the Brazilian economy. From the first operation, in 1967, to the consolidation as one of the most strategic investments for the expansion of the Brazilian industrial production, the leasing had a trajectory very guided by the entity’s tireless work to bring more security to the activity.

One of the great challenges that we must defeat is the vicissitudes caused by the imprecision of the Brazilian tax system and the hesitancy that people have over the product; therefore, it is imperative to create a specific leasing regulation. The sector aims to work calmly, without the tax litigation continuing to threaten the survival of this type of credit that has already been so expressive, reaching 3.5% of national GDP.

December 2009 went down in history as the best year of leasing, with the balance of the Portfolio Present Value (VPC) reaching the huge amount of R$ 110 billion. Since then, operations have been losing space for other types of credit due to the legal insecurity caused by skepticism about the place of payment of the Brazilian Municipal Service Tax (ISS), an important discussion in this field, which has been dragging on since 2002. In this struggle, at the moment, the lease-purchase agreement is under an injunction of the Brazilian Federal Supreme Court (STF), which suspended the provisions of LC No. 157/2016.

With the advent of LC No. 175/2020, the legislator sought to transfer the place of payment of the ISS to the municipality where the lease-purchase agreement service takes place, again violating the precepts of our Constitution.

Brazil needs, more than ever, to stimulate production and unlock investments. Leasing should participate as an instrument to propel growth, especially now when our economy needs so much in this post-pandemic period.

COVID-19 came up and brought a global crisis with it. It impacted health, our lives as a whole, and also the global economy. In this rebuild, credit in general and leasing, in particular, should be pillars of sustaining productive activity. The contributions made in capital goods, for the expansion of production, trigger a series of systemic effects, promoting jobs in a sustainable and lasting way, and increasing income and tax collection. The benefits extend to the whole society.

Unlike in developed countries, where leasing legislation is widely consolidated and has an important role in their economies, in Brazil, the legal insecurity generated by our complex tax system prevents lessors from taking a breath and playing their role in supporting productive investments. In this sense, in addition to improving the regulation of the lease-purchase agreement, it is essential for Brazil to have a new taxation model so that companies feel secure in investing. The tax reform will be very important to ensure the resumption of growth, adjusting not only the national tax burden that already supplants the house of 33%, but also provide the national tax system with operational simplicity to eliminate the high cost of compliance imposed on all taxpayers.

The pandemic moment that we are going through calls for action, responsibility, union, and conversation, but Brazil has always shown itself to be greater than the crises it has faced throughout its history. Faced with the essential assumption that the good performance of the economy depends on the ability of companies to invest in modernization, process improvement, and the search for excellence, leasing, as a flexible, modern, and long-term credit line has much to contribute to this endeavor.

In this 50-year anniversary, ABEL reinforces its tireless commitment to a better and safer environment for the sector to grow, meeting the needs of our economy. Thus, we seek commitment to the best market practices, focus on the future, and interest in contributing to the development and growth of our country. We hope to succeed in writing more of this chapter of our history.

We thank everyone who collaborated to get us this far.


Osmar Roncolato Pinho is the president of the Brazilian Association of Leasing Companies (Abel)