Laws of Incentive

The Lei Rouanet or The Rouanet Law is a Brazilian fiscal/cultural incentive law that allows any corporation to pay 4% of its owed income tax to finance cultural projects. It is the main mechanism for cultural financing today. An artist first has to ‘insert the project into the Law’. Some producers specialize in inserting projects into the law. This means the project has to be filled out on the internet for approval from The Ministry of Culture (MinC). Once approved, the project is published in the Diário Oficial, the government’s official publication. With this publication the project qualifies to be financed by any company, corporation or private individual. It is then up to the artist and/or producer to go after this owed tax money amongst sponsors. The Lei Rouanet is often referred to as Lei de Mecenato or Maecenas Law but this is wrong because the money involved is owed public money and not corporate or private money. Minister Juca Ferreira recently admitted: “It seems like its private money but it’s not. We have created an addiction of patronage using public money.”

The problem with this mechanism is that corporations will finance cultural works with which they want their brands to be associated. So productions containing Globais, or famous actors, from the entertainment industry are more likely to attract sponsorship than smaller or lesser-known productions. This is not patronage. It is money that the corporation would have had to pay as tax to the government. Yet corporations still get their logos attached to the project. In a way it is free advertisement for companies using tax-payer money. Frequently before performances begin there are long recordings listing sponsors and even promotional corporate videos of sponsors. The interest in sponsoring theatre is more for PR reasons rather than meeting the needs of the artist.

Nonetheless the Lei Rouanet has become the model for theatre and cultural financing and has inspired state and municipal governments to establish their own Leis de Incentivo (Laws of Incentive). In 2009 the Ministry of Culture has improved the Lei Rouanet. It is now possible, for example, to enter a project into the Lei Rounet via internet.

The Cirque du Soleil Incident

In 2006 the Cirque du Soleil came to Brazil for the first time and, with the help of the Lei Rouanet, received 9 million reais. The fact that Cirque du Soleil used public money in addition to charging up to 400 reais, almost 200 euro’s, per ticket caused a huge revolt in the cultural sector and the press to the point of the Ministry of Culture needing to post an official explanation of what happened on their website.

The production company CIE Brasil was responsible for bringing Cirque du Soleil to Brasil and submitted the project to the Ministry of Culture requesting 22,3 million for two projects: 16,6 million for presentations in São Paulo and 5,7 million for presentations in Rio de Janeiro. The Ministry of Culture approved 9 million. The approval of the project meant that CIE Brasil could ask (in this case) Bradesco Bank (the main sponsor) for the 9 million reais that the bank would have otherwise paid in taxes to the government.

After heavy criticism from the cultural sector the Ministry demanded that they present a plan of ‘democratization of access’ to classes of lower income and suggested ideas such as offering cheaper tickets, free presentations, the broadcast of the performance on public television, workshops for Brazilian professionals or anything the producer CIE Brasil might suggest. CIE Brasil’s counterproposal was considered unsatisfactory and the remainder of the money they had requested was denied. Because of the Cirque du Soleil incident the Lei Rouanet has since been revised making the ‘democratization of access’ more important. The Ministry of Culture’s final statement on denying Cirque du Soleil access to more tax money was: “The premise that guides the Ministry of Culture is simple: public funds invested in cultural projects should benefit the largest possible audience.” Read more on this incident (in Portuguese).

Dealing with the Lei Rouanet, one must be very cautious. The perception in Brazil is that Holland, as is any other European nation, is a rich country and, as in the case with Cirque du Soleil, Brazilians will not appreciate companies from richer nations using their public funds unless you have a good “contrapartida”, a concept, plan or workshop that shows you are willing to facilitate access of your work to the excluded segments of Brazilian society.

The Lei Rouanet’s position as the main mechanism for cultural funding may change over time. The government will implement the new Plano Nacional de Cultura, a cultural policy which would involve direct funding from Brasilia as well as more State and municipal funding. This greatly diminish the need for artists to depend solely on corporations that are mostly only willing to sponsor big names in the Arts and Entertainment industry.