Government eliminates import tax on wheat flour, meat, chicken and 4 other foods – News

The Ministry of Economy announced this Wednesday (11) that it will zero import tax of seven food products: beef boned; frozen chicken meat, pieces and offal; wheat; flour; corn in grains; crackers and biscuits; and bakery, pastry and biscuit industry products. The rates for purchasing these products on the foreign market ranged from 7.2% to 16.2%.

The measure is part of a policy of gradual opening of the economy, which aims to encourage internal competition and thus force domestic producers to lower prices. Wheat flour, for example, is one of the most expensive foods in the last year: it accumulates inflation of 23.2% in the last 12 months, according to the IPCA (Broad Consumer Price Index), measured by the IBGE (Brazilian Institute of Geography and Statistics).

“This is a transversal reduction of taxes; we have already done that with the IPI reduction [Imposto sobre Produtos Industrializados] of 35% for almost all products. We are going through a moment of strong inflation, which has harmful power for the population. We seek to make reductions or zero the import rate to increase the competitiveness of our products”, explains Marcelo Guaranys, executive secretary of the Ministry of Economy.

He says that the measure prioritized items that weigh the most in the consumption basket of the poorest sections of the population, considering the goods that make up the National Consumer Price Index (INPC).

In addition to food, import tariffs on two inputs used in agricultural production change: sulfuric acid, an ingredient in phosphate and sulfate fertilizers, whose rate was 3.60%, is reduced to 0%, and that of the fungicide Mancozebe is reduced from 12 .60% to 4%. Ana Paula Repezza, executive secretary of the Chamber of Foreign Trade (Camex), says that, in these cases, the objective of the decision is to reduce production costs and, thus, try to curb inflation. “All the import tax reduction and exemption proposals analyzed at today’s Gecex meeting [Comitê-Executivo de Gestão] of Camex were unanimously approved.

This includes tariff reductions for two categories of steel rebars used in civil construction. “It was a request that had already been analyzed by the ministry for eight months, it was put forward by representatives of civil construction, a sector responsible for generating many jobs and that we want to have a positive impact. Therefore, the decision was to reduce the import tax “, says Ana Paula.


The exemptions and new taxes come into effect this Thursday (12) and are valid until December 31, 2022. According to Herlon Alves Brandão, Undersecretary of Intelligence and Foreign Trade Statistics at the Foreign Trade Secretariat, the impact of measure in the country’s collection in this period is up to approximately R$ 700 million, as it depends on the variation of the exchange rate.

“But it is important to emphasize that the import tax does not have a collection function, its role is to regulate the market. This is an important point, it is what is behind the policy. Therefore, there is no need for a compensatory action for this impact. “, says the deputy executive secretary of Camex, Leonardo Diniz Lahud. He says that an analysis of the impact on national production was carried out, and that there is no loss. “We want to give a “supply shock”, generate impact on price formation, with benefit to the consumer.”

“Inflation in several countries has been the highest in the last 30 years, it is a worldwide concern. The minister’s orientation is to try to reduce the impact on our population”, says Guaranys.


Steel

Requests to reduce the import tax on steel rebars arrived at Camex between July and August 2021. This was a demand from the civil construction sector, says Ana Paula.

Executives from Instituto Aço Brasil, an entity representing Brazilian steel-producing companies, met yesterday with Minister Paulo Guedes and members of Camex. They wanted to avoid reducing the import tax, claiming that steel is not responsible for inflation in the construction sector and that there is a national and global surplus in the production of this metal, which did not achieve the expected result.

“This request had already been analyzed by the ministry for eight months. It was taken to the tariff changes committee, which recommended, by consensus, the reduction to 4%, which is the world average of the import tax on these products. representatives of Aço Brasil and construction personnel, it is Camex’s obligation to listen to the interested parties and act with transparency, says Ana Paula. She says that these meetings are part of the processes, and that all requests related to tariff reduction are available at the Chamber of Commerce website.


Mercosur

The Import Tax is reduced through the inclusion of products in the List of Exceptions to the Mercosur Common External Tariff (LETEC). This is due to the fact that the four countries that make up the economic bloc — Brazil, Argentina, Uruguay and Paraguay — have entered into an agreement to mutually benefit through the TEC (common external tariff).

Established in 1995, the TEC is an import tax (a percentage of the value of the goods), which is levied on countries that are not part of Mercosur, but want to sell their products to one or more countries in the bloc.

But there are exception instruments, which allow each country to choose some products exempt from the payment of the TEC, or with a differentiated charge. One of them, previously authorized by Mercosur, is Letec (list of exceptions to TEC), in which the 11 new products were included. “This inclusion is a studied, debated movement, which depends on other ministries, because there is a maximum number of items that we can have on the list, and there is a limit of changes per semester”, explains Lahud. He says that some products, such as the drug clonazepam and mozzarella, had to be removed from the list for others to enter. “They go back to having the previous rate,” he says.


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