Exporters Press Rousseff to Maintain Tax Breaks

02/18/2015 - 08h54

Business entities move to pressure Dilma Rousseff's administration in order to maintain the current compensation rate called Reintegra; a program that grants tax breaks to exporters.

This Friday (18), seven industry associations forwarded a letter to the president with a copy to the Ministers Aloízio Mercadante (Chief of Staff), Joaquim Levy (Finance), Armando Monteiro (Development, Industry and Foreign Trade) and Nelson Barbosa (Planning) asking for the program "to be made permanent and keep a minimum percentage of than 3%".

It currently allows producers to accumulate credit equivalent to 3% of the export revenue, but the economic team defends the percentage should be reduced as part of the fiscal adjustment.

In the document, entities such as Brazil Steel Institute (Siderurgy) and Abimaq (Brazilian Machinery and Equipment Association) claim that maintaining the current tax rate for a long period is not enough to make Brazilian exports competitive and to avoid unemployment.

Otherwise, "the economic result will undoubtedly be affected". The associations still demand reliability in the reimbursement of the credit done by the Federal Revenue Bureau of Brazil.

Created in 2011, the program was expected to be due in a year. It has been extended and, in the past, re-released as a definitive tax incentive.

However, to recreate it, the government decided the rate would be established by the Finance Ministry and it could vary from 0.1% to 3%.

Former Finance Minister Guido Mantega fixed the rate at 3% a few days from the start of the presidential election.

After Rousseff's victory and Joaquim Levy's appointment, the new Finance Ministry quietly began to argue for its reduction. In 2015, the Reintegra program should cost US$ 2.12 billion.

A CNI [Brazilian National Confederation of industry] assessment concluded that any reduction in the benefit would effect the National Export Plan, expected to be launched in March, to lose strength.

Translated by JULIANA CALDERARI

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