Brazil: agriculture sector worries increase in taxes on agrochemicals

Reports about a possible increase in taxes on agrochemicals has left the Brazilian agricultural sector worried. The fear is linked with the Unconstitutionality Direct Action (Adin No. 5,553), which would result in the removal of benefits and fiscal exemptions conceded to the chemical industry.

 

Vice-President of the Brazilian Association of Cotton Growers (Abrapa) Júlio Cézar Busato explained that this would attack the clauses of the covenant 100/1997, which supported the farmers and the pesticide industry with the reduction of tax over the circulation of goods and services (ICMS, somewhat similar to the US sales taxes). The procedure in process at the Brazilian Supreme Court questions a decree that concedes exemption from the tax over Industrialized Products (IPI).

 

The problem was debated on February 19, during the meeting of the Thematic Chamber of Inputs of the Ministry of Agriculture, Livestock, and Supply (Mapa). The complaint of the producers was that the pressure ends up raising the cost of products such as herbicides, insecticides, and nematicides, among other vegetable products.

 

“This tax increase will generate more costs for producers, which could raise the prices of several products for the final consumer, bringing even more inflation,” said Busato, who is also the president of the Thematic Chamber of Inputs. According to the union leader, this complaint will be taken directly to the executive secretary of Mapa Eumar Novacki, as a way of anticipating an intermediation with the Minister of Agriculture, Blairo Maggi.