In a sign to the industry, Haddad says that the Lula government does not intend to re-encumber IPI

The Minister of Finance, Fernando Haddad (PT), stated that the government will not revoke the reduction of the IPI (tax on industrialized products). The petista was questioned on the subject in Davos this Monday (16), when asked about the statement by the vice president and Minister of Industry, Geraldo Alckmin, that “the next goal is to end the IPI, and end the IPI is tax reform”.

“We decided not to increase the IPI tax precisely to signal to the industry that we want to approve the tax reform. It is essential to seek tax justice and reindustrialize the country, because the industry pays almost a third of taxes today [do Brasil] and accounts for 10% of the economy,” he told Brazilian journalists in the Swiss city.

Haddad is in Davos, together with Minister Marina Silva (Environment), to participate in the annual meeting of the World Economic Forum.

The possibility of including the repeal of the 35% IPI cut in the fiscal package announced by Haddad last week had left the industrial sector on alert.

Asked about the deadlines for the tax reform, the minister was optimistic. “There are two proposals that are drawing the attention of parliamentarians, the two PECs [proposta de emenda à Constituição] 45 and 110, and we understand that the path is to arrive at a consensus text. If it depends on the government, we will vote on the tax reform in the first half of the year,” he said.

“If Brazil takes the measures it needs, and we need the three Powers to raise awareness of this, if the agenda we are proposing moves forward, a new fiscal framework in the first half, tax reform in the first half, and measures to democratize access to credit, Brazil has no reason not to take off,” he added.

Remembering that his predecessor in the portfolio, Paulo Guedes, also said in his first participation in Davos, in 2019, that he would approve a tax reform in six months, he replied that the problem at the time was the proposal of the previous government, centered on recreating the CPMF (tax on financial transactions).

“The fact is that you bet on the wrong reform,” he declared. “The CPMF is dead and buried.”

Haddad claims that the reform spearheaded by economist Bernard Appy, the ministry’s special secretary, has been under discussion for six years. He also declared that there is no intention to increase the tax burden, although he stressed that some type of calibration may be necessary during the transition.

The minister met this Monday with the head of the UNDP (United Nations Development Program), Achim Steiner, with whom he discussed education, and with the president of the IDB (Inter-American Development Bank), the Brazilian Ilan Goldfajn, to talk about lines of credit for clean energy in Brazil, something that the bank encourages.

Haddad landed in Davos early Monday afternoon with the intention of selling a Brazil with a solid economy and democracy and dedicated to the environmental agenda. Stayed at the same hotel as the governor of São Paulo and his former electoral opponent, Tarcísio de Freitas, the two bumped into each other after talking to the press and exchanging a hug and friendly questions.

This Tuesday, he participates in a panel on Brazil alongside Marina Silva, in a lunch offered by Itaú BBA bank and in a dinner promoted by BTG, both with investors. The agenda for bilateral meetings for the next two days had not yet been sealed.