Brazil to cut business taxes, stimulate economy

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Brazil to cut business taxes, stimulate economy
SAO PAULO (BDCi) – – The newspaper O Estado Sao Paulo reports that the Brazilian government will reduce the tax burden for several industries in efforts to stem an economic slowdown caused by the strengthening of the Real.

The project to be implemented ‘in coming weeks’, contemplates that the benefited factories pay a minimum percentage of sales, but that figure is yet to be established.

This apparently will be the first package of the ‘arsenal’ promised by Finance minister Guido Mantega who said Brazil will not remain “with crossed arms” while the “currency exchange war” keeps advancing and eroding manufacturing competitiveness.

Mantega was instructed by President Dilma Reousseff to take the measures needed to stop the appreciation of the Brazilian currency which in the first two months of the year re-valued 10% against the US dollar, and at the same time prop the economy that last year expanded a weak 2.7%.

Brazilian industry also suffered a slowing down in 2011 when it expanded 1.6%, compared to 10% in 2010 and last January actually contracted 3.4% relative to the same month a year ago.

Besides the newspaper report, quoting Finance ministry sources, said that ‘most probably’ next April the industrial production tax on home appliances, a provisional measure implemented in 2011 and which should conclude 31 March, will be extended.

Source: Mercopress
Image courtesy of: Mercopress
10 March 2012

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