Idea of reduction for food products and ethanol has an impact on inflation and begins to take effect this Wednesday
The Ministry of Economy announced yesterday the reduction of import taxes on two fronts, one lasting until the end of the year and the other permanent. The first, classified by the ministry as a cyclical measure, reduced to zero the rates on seven products with great influence on the National Consumer Price Index (INPC): coffee, margarine, cheese, pasta, sugar, soybean oil and ethanol.
Furthermore, structurally, a 10% cut was made in tariffs linked to capital goods and IT. The first measure comes into force tomorrow, Wednesday, when both will be published in the “Official Gazette” of the Union” (DOU), although the reduction on capital and IT assets will only start to take effect on April 1st.
The ministry calculates that setting the ethanol tariff to zero will reduce the price of gasoline at the pump “in the order of 20 cents”, according to the Secretary of Foreign Trade, Lucas Ferraz. This does not prevent “the price from continuing to rise”, due to external factors, for example, according to him. “But our idea is to have a supply shock,” he said, highlighting that “the scenario [of production bottlenecks] is even more worrying with the war.”
The executive secretary of the department, Marcelo Guaranys, acknowledged that the government is concerned “with the impacts of inflation on the poorest population and the population in general”.
“This does not solve inflation, which we attack with monetary policy, but it generates an important effect,” he said.
The Ministry of Economy does not have a projection for the impacts that the reductions may have on the INPC. “But the price level is expected to suffer a negative impact,” said Ferraz.
The previous import tariffs were 9% for coffee and soybean oil, 10.8% for margarine, 14.4% for pasta, 16% for sugar, 18% for ethanol and 28% for cheese.
Regarding the total reduction of 20% in the tax on capital goods and IT (last year, the government had already reduced the rate by 10%), Ferraz stated that the ministry calculates that the measure will “cumulatively add” an increase of R$ 282 .5 billion for the Brazilian Gross Domestic Product (GDP) over the next 18 years.
All members of the Ministry of Economy drew attention to the structural nature of this reduction, ensuring that it will have an impact on the country's productivity. The executive secretary of the Chamber of Foreign Commerce (Camex), Ana Paula Repezza, recalled that Mercosur rules allow the reduction unilaterally, as the bloc's partners have a kind of license to cut these rates in the case of goods from capital and information technology.
She also highlighted the fact that both measures were “approved unanimously”. According to the Secretary of Foreign Trade, the tax waiver with the measures is “low”, standing at R$ 1 billion per year. He also recalled that the reductions are in accordance with the Fiscal Responsibility Law (LRF), because taxes on imports are regulatory in nature, which means that the cut in rates does not require compensation.
“We intend to announce even more things this week, things related to credit and cost reduction in Brazil,” said Guaranys, stating that these announcements depend on President Jair Bolsonaro’s (PL) agenda.
By Estevão Taiar — From Brasilia
22/03/2022
Source: Valor Econômico
