The Tragic End of Travancas the Terrible

A venerable and usually heeded Brazilian saying is that "taxes are to be evaded, not paid." Thus, of all the reforms imposed by the country's three-year-old military government, none caused more grumbling among business men and politicians than the decision to make more Brazilians cough up more cruzeiros by tightening the income tax laws. The man who got the job in 1964 was Tax Chief Orlando Travancas, 48, who did it so well that he soon became known in Brazil as "Travancas the Terrible." He doubled the number of taxpayers (to 3,000,000), raised revenues from $135 million a year to $960 million, and forced Brazilians for the first time to take their taxes seriously. Last week Travancas got repaid with interest for his efforts. As part of his move to "humanize" his government, President Arthur Costa e Silva called Travancas in and summarily sacked him.

Travancas' fault was simply that he had been too successful. Before he took over Brazil's tax rolls after the 1964 military coup, only half of the country's 200,000 self-employed lawyers, doctors and small businessmen filed returns; and 95% of those returns, the government estimated, were false. In fact, the country's economists claimed that, if all Brazilians paid their taxes and businessmen brought home the $400 million they had stashed in foreign banks, Brazil could even do without foreign aid.

A Natural Choice. Declaring all-out war against tax dodgers, then-President Humberto Castello Branco pushed through a law making tax evasion a crime (maximum penalty: two years) and providing for payroll deductions and official inspection of private bank accounts. An economist and accountant with 22 years' experience in tax work, Travancas was a natural choice to head the program. He began by weeding out dishonest tax collectors and setting up special training programs for new recruits. To find Brazil's big spenders, Travancas' agents combed membership lists in race-track and yacht clubs, studied society columns, watched overseas flights and sailings, and compiled lists of the most prominent bankers, industrialists, ranchers and other businessmen in every city. Then the tax men went to work on their returns.

When Costa e Silva took office last March and promised some relief from Castello Branco's brand of austerity, Brazil's upper classes began pressuring him to relieve them of Travancas. Costa held off, waiting for the right moment. It finally came when, during a television interview in Sao Paulo, Travancas described a big new crackdown on 3,000 delinquent companies. "If we were to look into all business returns in Sao Paulo," Travancas told his interviewer, "there would not be enough jail space to hold the tax evaders." Asked if a concentration camp were not the answer, Travancas joked that it might be "a good idea." The next day, Sao Paulo newspapers bannered the news that Travancas planned to send all Sao Paulo businessmen to concentration camps. Amid the resulting uproar, Costa saw his chance and fired Travancas. Henceforth, said the government, tax collections in Brazil will be handled with "kindness."

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