Brazil’s Industries Seek Return of Fiscal Benefits for Exporters

By Lise Alves, Senior Contributing Reporter

SÃO PAULO, BRAZIL – Brazilian industries are asking the interim government of Michel Temer to bring back the fiscal reimbursement for exporters. According to industry leaders the devaluation of the US dollar against the Brazilian real is hurting those who sell their products abroad.

“The dollar has devalued a lot in recent months. After the impeachment vote, if the permanence of the interim government is confirmed, the tendency is for foreign investment to come back (to Brazil), pressuring the exchange rate further down,” São Paulo Industry Federation (FIESP) President Paulo Skaf was quoted as saying to Agencia Brasil after his meeting with Finance Minister Henrique Meirelles. “Therefore, the industry thinks (government) support is important to maintain exports,” added Skaff.

What FIESP’s president is asking for is the return of the up to three percent reimbursement given to exporters through the Reintegra program. The program, created in 2012, was a way to compensate exporters for taxes charged throughout the productive chain of the manufactured product. Due to the weakening economic scenario, last year the government reduced the reimbursement to 0.1 percent.

According to Skaf, during the conversation between him and Meirelles, the FIESP leader told the government officials that he was totally against any proposal to increase taxes. “Businessmen are already overwhelmed with so many taxes. The outstanding debt is already at R$1.5 trillion, precisely because businesses can not afford to bear the tax burden,” he said.

Although Meirelles has stated that it several times that he will do everything not to have to increase taxes, Brazil’s Finance Minister has not totally discarded the idea. Last week a document released by the IMF (International Monetary Fund) recommended that the Brazilian government increase taxes to seek to balance its public accounts.