New Laws Will Make Life Easier for Exporters in Brazil

    Up to the end of this month, a series of measures to provide incentives to exports should be put in place in Brazil.

    The Brazilian minister of Development, Industry and Foreign Trade, Luiz Fernando Furlan, announced, at the end of last week, a package of provisional measures to reduce the weight of taxes on export companies.


    The package intends to reduce the cost of installation of industrial units, accelerate decisions by foreign and domestic businessmen to invest in the country and increase company fixed capital, as well as providing incentives to exports.


    The provisional measures should be signed by president Luiz Inácio Lula da Silva up to the end of the month.


    The first measure will eliminate two federal taxes, PIS (welfare tax) and Cofins (social security tax), on investment by domestic and foreign companies that export at least 80% of production. This is going to mean an economy of approximately 11% over the total cost of the enterprise.


    “With this, the government plans to reduce the cost for installation of industrial units, making it possible for Brazil to compete in the attraction of foreign direct investment,” explained minister Furlan.


    The second measure forecasts the cancellation of the PIS/Pasep and Cofins taxes for Brazilian and foreign companies in the information technology sector that invest in the country. But, to be exempt of these taxes, they must also export 80% or more of production.


    With the measure, stated the Minister, the government hopes to increase exports of software and information technology services to US$ 2 billion up to 2007. In 2004, exports totalled US$ 400 million.


    The third measure forecasts the concession of incentives to technological innovation in automated companies. According to the project, prior approval is no longer necessary, reducing bureaucracy.


    The fourth measure of the package extends up to December 31, 2006, the permission for companies to use 25% of their Net Profit Contribution (CSLL) for the purchase of machinery, equipment, instruments and new machinery.


    The current permission ended on December 31 this year. With the measure, according to the minister, the government intends to expand investment in modernization and in the updating of production technology.


    The fifth measure covers digital inclusion and forecasts the creation of the Connected PC Program, which proposes the elimination of social contributions, of PIS and Cofins on the purchase of microcomputers costing up to US$ 1,020 for the end user. The benefit will be valid for four years, and may be extended due to the results reached.


    According to the president of the National Confederation of Industries (CNI), Armando Monteiro Neto, the package means, mainly, that it is possible for Brazil to become more attractive to investment turned to export.


    ABr and Anba

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