The Regulation of the Collection of Telecommunication Service Provider Contributions to the Telecommunications Technological Development Fund (FUNTTEL) was submitted to public consultation by Communications Ministry Ordinance 33, published in the Official Gazette on February 23 2001.

The provisions contained in this draft are provisory, and for the definition of the rules to be applied to FUNTTEL it is necessary to await the publication of the final regulation, through an executive order issued by the Executive Branch.

FUNTTEL, created by Law 10,052/00, is a fund of an accounting nature. Its objective is the successful development of the domestic telecommunications industry. One of the revenue sources of this fund is the contribution of 0.5% of the gross income of company providers of telecommunication services (of both public and private regimes).

The main purposes of the regulation are to:

  • legislate for FUNTTEL's collected contributions;
  • establish the submission of FUNTTEL's own budget proposal to the Communications Ministry; and
  • settle budgetary and financial accounts.

In the context of FUNTTEL Article 4 provides certain definitions. 'The debtor' is defined as "all telecommunication service providers". 'The rate' is defined as "0.5%". 'The contribution base' is defined as "the gross operating income amount", and 'levy events' as "telecommunication services dealt with in Article 60 of Law 9,472, of 1997".

Article 4 also outlines the aspects relating to deductions from the contribution base, such as value added tax on sales and services, contributions to the social integration programme and turnover tax on gross profits, as well as to cases of non-levy.

Article 5 determines that FUNTTEL revenue collection will be conducted exclusively through federal revenue collection documents through the banking system. Contributions are to be paid monthly, on or before the last day of the month following that in which the gross operating income was earned. The revenues derived from contributions will be centralized at Banco do Brasil SA and deposited in the Sole Account of the national Treasury, and credited to FUNTTEL.

Article 8 sets out the sanctions in the event of the non-payment of the contribution. These include an inscription in the Federal Public Sector Unpaid Credits Informative Official Register (CADIN) and recording of the debt in the Dívida Ativa (ie, a document detailing outstanding debts to the federal government).

Articles 9 to 15 list the cases of rebate or compensation requests, and the rules to be observed by providers when making such requests.

The Communications Ministry will be responsible for managing FUNTTEL payments and the relevant information for the exercise of this management shall be at the ministry's disposal for five years.

Comments and suggestions concerning the regulation must be in Portuguese and must be sent to the Communications Ministry by March 12 2001.

For further information on this topic please contact Ricardo Barretto or Bruno Girão Borgneth at Barretto Ferreira, Kujawski, Brancher e Gonçalves – Sociedade de Advogados by telephone (+55 11 3066 5999) or by fax (+55 11 3167 4735) or by e-mail ([email protected] or [email protected]).

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