Cisco still on defensive over Brazil tax evasion

Global networking group Cisco Systems continues to distance itself from an alleged tax evasion case in Brazil, involving taxes, fines and interest totalling $US826.4m (₤400m), saying it cannot vouch for its resellers.

Three of four Cisco employees detained by Brazilian authorities last week in connection with the alleged tax evasion scheme have now been released. Pedro Ripper, Cisco Brazil president, is reportedly among the released employees. He is expected to return to his role as country manager of Cisco Brazil.

Cisco has confirmed Mude Comercio e Servicos, one of Cisco's Brazilian distribution partners, is one of the companies under investigation. Brazilian federal police officials in charge of the case told Reuters newsagency ‘It's inevitable that this investigation is going to lead us to headquarters’.

Authorities said Cisco also systematically understated the value of merchandise it imported to pay less taxes and frequently issued falsified receipts and other documents.

The networking group said this week it worked with more than 55 certified channel partners in Brazil which accounted for more than 90% of its sales in the country. Cisco did not believe it had acted inappropriately in its Brazilian business activities. It counted ethics, integrity and compliance as core to its corporate identity and required each of its employees to sign a code of business conduct.

Further reading:

Cisco in damage control after Brazil tax raids

Cisco's Brazil office faces tax probe