Brazilian government intends to increase taxes on chemical industry
May. 12, 2016
Brazil’s suspended president Dilma Rousseff has submitted a bill to the National Congress that reduces fiscal benefits to chemical industries through the Special Regime of the Chemical Industry. The bill reduces the tax breaks on a variety of different taxes.
With the change, the government intends to increase R$ 800 million in the revenue, compensating the losses of an increase of 5% on exemptions of income tax, which represents the entrance of R$ 5.2 billion less of revenue in 2017, according to Finance Minister, Nelson Barbosa.
The alterations proposed by the Brazilian government will make that the chemical industry to face an increase of up to 3% at the cost of the raw material in 2017, affirms Fernando Figueiredo, president of the Brazilian Association of the Chemical Industry. “Last year, the government tried to eliminate this tax benefit. The original idea was to reduce the incentive by half this year and extinguish it in 2017,” he said.
"The industry is not happy, but it can’t complain that is surprised. The impact of R$ 800 million in government revenue is an impact of R$ 800 million on the pockets of the chemical industry and its customers,” he pointed out to The Associated Press.