Ethanol import tax is zero and promises to reduce the price of gasoline by R$ 0.20; food, capital goods and information technology also entered the IPI reduction list

Flavia Marinho
per
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04-04-2022 07:02:00
in Oil, Oil and Gas
ethanol - gasoline - price - import tax - fuel - consumer goods - food - IPI Government eliminates ethanol tax and gasoline price will reduce R$ 0.20




Federal Government zeros import tax on six foods and ethanol. On the list of foods are roasted coffee, margarine, cheese, pasta, sugar and soy oil; forecast is for a reduction of up to R$ 0.20 in the price of gasoline

On the 23rd, the Federal Government rreduced the import tax on six basic food items and ethanol to zero, which promises to reduce the price of gasoline by up to R$ 0.20. The measure was approved at an extraordinary meeting of the Executive Management Committee (Gecex) of the Chamber of Foreign Trade (Camex), a body linked to the Ministry of Economy, and seeks to reduce the impacts of inflation.

In the list of foods with import taxes zeroed by the Government are roasted coffee, margarine, cheese, macaroni, sugar and soy oil. According to the Ministry of Economy, these products had a rise in prices above the country's average inflation. Until then, the Import Tax was 28% for cheese, 14.4% for sugar, 14.4% for macaroni, 10.8% for margarine, 9% for coffee, 9% for soybean oil and 18% for ethanol.

“We are also very concerned about the impact of inflation on the poorest population, on the population in general. We know how much this can erode everyone's purchasing power”, highlighted the executive secretary of the Ministry of Economy, Marcelo Guaranys.

Ethanol tax cut will impact gasoline price

O Ethanol tax cut will impact gasoline price. This is because a percentage of 25% of ethanol is added to gasoline sold at gas stations across the country. “With the reduction to zero of the import tariff [on ethanol], which today is 18%, we have an estimate that this could lead to a reduction in the price of gasoline”, said the Secretary of Foreign Trade of the Ministry of Economy, Lucas Ferraz.

The tax will be zeroed from this Wednesday (23/03), when the measure is published in the Official Gazette of the Union, and is valid until the end of the year.

Reduction of 10% in Import Tax on capital and IT goods

At the same meeting, Camex approved the reduction by 10% of the Import Tax on capital goods, which are machinery and equipment used in industry, and on IT and telecommunications goods, such as computers, tablets and cell phones.

This was the second cut in the tariff on imports of capital goods and telecommunications. In March of last year, the Federal Government had also reduced this rate by 10%. With that, the tax cut reaches 20%.

This reduction in the tax burden, as well as others, is one of the structuring measures that have been adopted by the Ministry of Economy to increase the country's competitiveness, stimulating the generation of employment and income.

With the decision, a product that had an import tax rate of 14% before the reduction carried out in 2021, will now have, with the second reduction, a rate of 11.2%.

According to the Ministry of Economy, the measure seeks to increase the productivity and competitiveness of the Brazilian economy, by reducing the costs involved in importing strategic products.

The Federal Government estimates that the reductions in the import tax will prevent the Union from collecting R$ 1 billion this year. As it is an extra-fiscal tax, of a regulatory nature, the presentation of compensation measures, as authorized by the Fiscal Responsibility Law, is waived.

IPI reduction

THE reduction in the Import Tax was adopted by the Federal Government after giving incentives to the national industry. In early March, President Jair Bolsonaro issued a decree that reduces the Tax on Industrialized Products (IPI) by 25% for most products. Among the various products covered by the measure are white goods such as refrigerators, freezers, stoves, washing machines and automobiles.

For some types of automobiles, in accordance with current incentive policies, the rates will be reduced by 18.5%. The IPI is levied on industrialized products, national and foreign.

In this way, the Federal Government works with incentive measures for the recovery of the economy and expansion of productivity, contributing to the dynamism of production, generation of jobs and income.

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Flavia Marinho
Production Engineer post-graduated in Electrical Engineering and Automation. Experienced in the onshore and offshore shipbuilding industry. Get in touch for a suggestion of an agenda, disclosure of job vacancies or advertising proposal on our portal.