Tax on agrochemicals may rise with tax reform in Brazil

Date:07-28-2020

The Proposed Amendment to the Constitution (PEC) 110, under analysis by the Senate, allows agribusiness to receive different treatment in the tax reforms, according to consultant Eduardo Lourenço, from the Pensar Agro Institute. 

Meanwhile, PEC 45, which is in the Chamber, can remove the benefits granted to the sector, such as the 1977 Agreement 100, if it is approved the way it is at the moment.

The agreement guarantees agriculture and livestock reductions of up to 60% in the Tax on Circulation of Goods and Services (ICMS), which is levied on agricultural inputs, such as fertilizers and pesticides, traded between the states. In April, the National Council for Farm Policy (Confaz) extended the benefit until the end of 2020. The end of exemptions could raise the cost by up to 14.3% production of rural activity, according to the Confederation of Agriculture and Livestock of Brazil (CNA).

The National Union of the Industry of Products for Plant Defense (Sindiveg), alerted the Minister of Agriculture, Tereza Cristina, to the risks of increasing taxes on agrochemicals and called for intervention to ensure the government does not tax the sector.

According to Sindiveg President, Julio Garcia, there was no specific demand, only a recommendation that at a time when the government is looking for revenue, the rural producer cannot be overwhelmed. In this case, this would not be exclusive to the agrochemical sector, but also all other inputs in the chain.

Garcia believed that with Agreement 100, the risk would be more concentrated by 2021. He approved discussions that involved the reduction of bureaucratization and complexity of taxation but said that producers and associations must be made aware that this does not affect the products, the chain and even the final consumer.

In conclusion, the Sindiveg president asked the agribusiness and other sectors to be vigilant so that taxes are not increased in the reforms, as there is no room anymore for that in the country, since the tax burden, as it is, is quite high. Minister Tereza Cristina is apprised of the matter and that there is good interaction between her, President Jair Bolsonaro, Mayor, Rodrigo Maia, and the Agricultural Parliamentary Front (FPA), he added.

The original Portuguese version of this report is from Canal Rural.