Brazil Promises to Boost Software Sales by 500%. Some Are Skeptical

Brazil's software sector should rise its exports from US$ 100 million to US$ 500 million and job creation should grow 20% with the measures announced by the Brazilian federal government as part of the policy for the software industry.

The estimate was made by André Fonseca, president at one of the five leading companies in the sector, Virtua, headquartered in the southeastern Brazilian city of São Paulo.

The businessman compared the incentives created by the new industrial policy for exporters to the Bolsa Famí­lia (Family Voucher) program of the federal government, as they are going to reward those who manage to meet the goal set by the program.

"I believe the government to be acting correctly, because rewards will be granted to whoever is generating results," claims Fonseca.

By the new industrial policy, the software and technology sector will benefit from a reduction in employers' contribution to social security relative to the payroll, down from 20% to a minimum of 10%, and of the contribution to System S (Sistema S – a set of eleven organisations turned to workers education, health and leisure) down to a minimum of zero, according to the share of exports in companies' revenues.

There should also be twice as much deduction when determining the basis for calculating the Income Tax and the Social Contribution on Net Profit (CSLL) for expenditures on accelerated personnel training programs.

The software export sector may also benefit from the permission for computing and automation companies to deduct, from the basis for calculation of the Income Tax and the CSLL, expenditure on research and development multiplied by a factor of up to 1.8.

The government also announced investment of 1 billion reais (US$ 597.2 million) until 2010 in the computing sector (new program for the Development of the Software and Information Technology Services Industry – Prosoft).

André Fonseca states that those measures are really going to boost software exports, but that the important thing is to wait and see how the measures are going to be implemented. This, according to him, is the prevailing sentiment in the sector, from what he heard in conversations with other entrepreneurs.

"The thing is, the measures cannot take too long to be implemented as a consequence of bureaucratic obstacles, otherwise they will all just remain on paper," asserts the president at Virtua.

ABr