The Jair Bolsonaro government (PL) made this Friday (25) a linear cut of 25% in the IPI (Tax on Industrialized Products). The decree was published in an extra edition of the Official Gazette of the Union and is not applied to products containing tobacco, which will remain unchanged at rates.
The measure generated complaints from states, which receive part of the IPI income. In their view, the government is wrong with the initiative because similar measures adopted by previous governments failed to encourage the industry and, moreover, there is no structural increase in revenue that justifies the reduction.
Minister Paulo Guedes (Economy) defended the measure saying that it will boost the Brazilian industrial park. “The 25% reduction in the IPI is a milestone in the beginning of Brazilian reindustrialization, after four decades of deindustrialization,” he said. “[O imposto] it was a stake in the Brazilian industry, and we are going to take that stake out,” he added.
According to the minister, the team even studied a 50% cut, but opted for a milder reduction to avoid a major impact on industries in the Manaus Free Trade Zone, which has as one of its differentials the exemption from IPI on goods produced in the region.
“Politics is here to stay. Now, there has to be enormous respect for a particular region,” said Guedes.
According to the minister, the ministry has a strategy for the North region that provides for a transition from the use of IPI credits to the use of carbon credits. “We guarantee that the Manaus Free Trade Zone will make the transition,” he said.
The government works together with the OECD (Organization for Economic Cooperation and Development) to develop a market for carbon credits and Guedes says that the market has the potential to generate US$ 100 billion a year.
The ministry estimates that Brazil may account for 18% to 25% of the global market for carbon credits.
The text of the decree provides for a cut of 18.5% in the case of vehicles, but the Economy explained that this category already had a different regime, with lower rates than other taxes. So, in practice, the effect will be a linear 25% cut for all but tobacco products.
According to Guedes, more than 300,000 companies will benefit from the reduction, especially the manufacturing industry.
Daniella Marques, Special Secretary for Productivity, Employment and Competitiveness, said that the IPI cut should generate an increase of R$ 467 billion in GDP (Gross Domestic Product) and of R$ 314 billion in investments, both in 15 years, according to estimates. of the Foreign Trade Secretariat.
The measure is seen by the Ministry of Economy as a way to transfer the largest collection observed over the last few months to the population and, at the same time, soften the effects of inflation. Despite this, Guedes says that price containment is not the central objective of the policy.
The cut in the IPI has also been commented internally as a response to the pressure for tax cuts aimed at fuels. For the Economy, the change in the IPI is more effective and beneficial for the country in general than subsidies for gasoline or diesel, initiatives that would be very expensive and would not bring significant results.
The cut in the IPI recalls initiatives taken during the PT era, when tax rates were also cut to boost the economy. Members of the Ministry of Economy, however, argue that the measures are different because, before, the cuts did not reach the sectors in a broad way – benefiting only white goods and automobiles, sectors that have more pressure in Brasilia.
The initiative points to two misconceptions. The IPI reduction in the recent past did not show a satisfactory result to encourage the industry and there is no structural increase in collection that justifies the reduction in revenues
The fiscal impact is calculated at R$ 19.6 billion, half for the Union and the other half for states and municipalities. As the IPI is a regulatory tax, the legislation does not require budgetary offsets to cover costs. Economy states that the initiative “will not affect the solvency of public debt and the federal government’s commitment to fiscal consolidation”.
The Comsefaz (committee of state finance secretaries) stated, in a note, that the measure intensifies the fiscal imbalance of states and municipalities and should weaken the consolidated result of the public sector.
“Any reduction in revenue with the justification that there was a structural increase needs to be viewed with concern. The states have been facing a serious fiscal crisis since 2014, they are far from recovering the necessary revenues to provide public services with the quality that the population needs”, they say. the secretaries.
Comsefaz recalls that, after the international crisis of 2008, the federal government implemented a series of subsidies with the objective of stimulating the industry. The IPI was one of the taxes used, mainly in the first half of the 2010s, with subsidies for white goods, automobiles and furniture. “The measure did not achieve the expected results, as recognized by the government at the time”, says Comsefaz.
In a note, the General Secretariat of the Presidency said that the changes represent a decrease in the tax burden of R$ 19.5 billion in 2022; BRL 20.9 billion for the year 2023 and BRL 22.5 billion in 2024. “Because it is an extra-fiscal tax, of a regulatory nature, the presentation of compensation measures is waived, as authorized by the Fiscal Responsibility Law “, said the ministry.
Mateus Vargas collaborated
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