Companies installed in the Manaus Free Trade Zone and parliamentarians from Amazonas are seeking to reverse the 25% linear cut in the IPI (Tax on Industrialized Products), carried out by the Jair Bolsonaro (PL) government last Friday (25).
For manufacturers installed in Amazonas, the inclusion of items such as motorcycles and televisions among those that will have a reduction in the tax rate will reduce the competitiveness of the Manaus hub in the face of competitors, in addition to causing legal uncertainty.
This is because manufacturers in Manaus no longer pay the IPI, so they will not have a cost reduction with the measure, while their competitors will have a relief in the tax burden.
A motorcycle imported from China, for example, paid 35% IPI until last week. Now, the rate has dropped to 26%. The costs of motorcycles produced in Manaus were not alleviated by the government’s measure, as manufacturers are exempt from this tax.
“We even agree with a greater reduction of the IPI, but we have a weight in relation to the Free Zone. In Manaus, IPI is no longer paid. By reducing the IPI for manufactured products [também] in Manaus, the Industrial Pole is less competitive compared to the imported product”, says the president of Eletros (National Association of Manufacturers of Electrical and Electronics Products), José Jorge do Nascimento Junior.
According to the business leader, Eletros has been negotiating since the end of last year the reduction of the IPI with exception for items also produced in the Free Zone and was surprised by the change. The decree, already in force, left out only products containing tobacco.
According to Nascimento, a study by Suframa itself (Superintendence of the Free Zone of Manaus), an autarchy of the federal government, pointed out the negative impact for Manais of a reduction of taxes for products that compete with those manufactured in the Free Zone.
“The linear cut causes unpredictability and legal uncertainty. All a businessman wants is to know what will happen in that business environment with the money he will invest,” he says.
Eletros’ proposal is that only products that are also manufactured in the Free Zone leave the IPI’s linear cut list.
Eletros brings together 35 companies in 11 states, of which 20 are in Amazonas. In the Industrial Pole of Manaus, the sector concentrates 51% of the revenue and employs 40% of the 106 thousand employees. In the capital of Amazonas, it manufactures air conditioning, microwave ovens, TV, audio, among other products. The data are from Eletros itself.
On the political front, the Amazon bench will have a meeting this Tuesday (8) with Minister Paulo Guedes (Economy) to discuss the matter. The parliamentarians claim that the federal government has not fulfilled the commitment, assumed by the special secretary for Productivity, Employment and Competitiveness, Daniella Marques, to exclude items produced in Manaus.
“The reduction of the IPI of the products produced [também] in the Free Zone makes it unfeasible to produce here. The most serious thing is that we did not lose competitiveness with other states, we lost to imported products and thus we transferred jobs from Amazonians to other countries, such as Pepsi, which went to Uruguay”, says federal deputy Marcelo Ramos (PSD-AM), who is vice president of the Chamber.
The congressman stated that, if negotiations with the federal government do not work, the bench will file a direct action of unconstitutionality in the STF and a representation for electoral crime in the TSE, considering that the IPI cut is a casuistry to favor Bolsonaro’s reelection.
In defending the measure, Guedes said that it will be “a milestone in the beginning of Brazilian reindustrialization” and that the team even considered a 50% cut, but gave up to avoid a major impact on the Free Trade Zone.
Speaking to Jovem Pan radio on Monday (28), Bolsonaro said that the Free Zone will not be harmed and that there are electoral interests in the criticism, mentioning Amazon senators Omar Aziz (PSD) and Eduardo Braga (MDB).
When contacted, Suframa did not review the study, advising against the linear cut of IPI. In 2021, the Manaus Industrial Pole (PIM), which is home to about 500 companies, earned BRL 158.62 billion, according to the autarchy.
The report tried to contact Marques, but there was no response until the text was completed.
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