Moraes, of the STF, suspends IPI cut for products from the Manaus Free Trade Zone

Minister Alexandre de Moraes, of the Federal Supreme Court (STF), suspended this Friday (6th) an excerpt from a decree by President Jair Bolsonaro (PL) that expanded the reduction of IPI rates. The measure is valid only for products that are produced in the Manaus Free Trade Zone.

The decision is at the request of Solidarity. The presidential act expanded from 25% to 35% the linear reduction of the tax on industrialized products.

“The Amazon region has socioeconomic peculiarities that require the legislator to give special treatment to inputs coming from this part of the national territory,” said the minister.

“Without the existence of compensatory measures for production in the Manaus Free Trade Zone, [a medida] drastically reduces the pole’s comparative advantage, thus threatening the very persistence of this constitutionally protected differentiated economic model.”

Moraes determined that the Planalto Palace be communicated with urgency of the decision and stipulated a period of ten days for information to be sent to the court. The Attorney General’s Office and the Attorney General’s Office will be heard next.

The measure was signed by Bolsonaro at the end of last month under the justification of stimulating the economy and reducing prices for consumers.

Launched in an election year, the initiative aimed to reach products such as refrigerators and washing machines, and went into effect immediately.

On behalf of the Amazonian federal bench, Solidariedade appealed to the Supreme Court on the grounds that the way in which the reduction of the IPI tax burden was implemented interferes with the competitive balance and affronts the constitutional protection of the Free Zone.

He also argued that the measure achieves tax incentives aimed at promoting the balance of socioeconomic development between the different regions of the country.

According to the legend, the loss of competitiveness will lead to the reallocation of productive investments and will contribute to the closing of factories.

“It is necessary to be clear that this aspect, embodied in the Industrial Pole of Manaus, attacked with unprecedented virulence, is the engine of the state’s economy”, said the Solidarity action.

One of the representatives of Amazonas in Congress, Senator Eduardo Braga (MDB) used social networks to say that Moraes’ decision guarantees the competitiveness of the Free Zone. “This will guarantee employment, investment and legal certainty,” he said.