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Santa Catarina tax authorities support IPI reduction and Fiesc believes in falling prices | Renato Igor

The industry and the state tax authorities celebrate the decree signed by President Jair Bolsonaro on Friday (25) and which reduced the Tax on Industrialized Products (IPI) by up to 25%. The position of Secretary of Finance (SC), Paulo Eli, goes against most of his colleagues from other states.

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The National Committee of State Secretaries of Finance released a note in which it criticizes the measure and points out that it will cause “fiscal imbalance of states and municipalities and should weaken the result of the public sector”.

The explanation for this difference in Santa Catarina’s position is simple: we are more industrialized than the national average.

While industry represents 11% of the national wealth, in Santa Catarina the sector is responsible for 26% of GDP.

The logic is the same as a cake to be divided among the guests. The expectation with the decree is that there will be a tax waiver of R$ 19.5 billion. The IPI is collected by the Union and a part is transferred to states and municipalities via funds. Many states and municipalities in the Northeast, for example, which are less industrialized, depend on these resources. But, with the tax waiver, the cake has reduced, but the guests remain the same.

According to Paulo Eli, the measure is positive because it strengthens the industry, increases our competitiveness and the resource will remain in Santa Catarina.

The president of the Federation of Industries (FIESC), Mario Cezar de Aguiar, believes that the reduction in the IPI may benefit the consumer with the reduction of prices of some products.

So be it.

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