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Against inflation, government must eliminate import tax on steel and 10 other products

To try to face a scenario of high inflation, the government is preparing a measure to zero the import tax rate on 11 products, including steel. The cut should be announced next Thursday and includes products from the basic food basket and civil construction, according to the Estadão/Broadcast with accredited sources who participated in the preparation of the proposal.

Also on Thursday, the government may announce a new general reduction of 10% in the Mercosur Common External Tariff (TEC), which would affect almost all Brazilian imports, leaving out a few sectors, such as automobiles and sugarcane. .

as anticipated the Estadão/Broadcastthe idea is, in the absence of the other countries that make up the group, to make a new cut in the rates charged for the purchase of products from outside the bloc, as was done at the end of last year.

With the measures, the government wants to give a “supply shock” by reducing the cost of importing various items, which would contribute to forcing down domestic industry prices. The 11 products that will be zeroed weigh on Brazilians’ pockets and have helped to increase inflation.

The assessment is that the reduction of the tax for imported products could be done without harming the national industry, since President Jair Bolsonaro’s decree expanded the reduction of the Tax on Industrialized Products (IPI) from 25% to 35%. Last week, however, Minister Alexandre de Moraes, of the Federal Supreme Court (STF), suspended the measure for industrialized products in the rest of Brazil that compete with those manufactured in the Manaus Free Trade Zone.

The import tax reduction on the 11 items must go through the Foreign Trade Chamber (Camex), a group that brings together representatives from various ministries, in addition to the Presidency. In March, the government adopted a similar measure by eliminating, by the end of the year, taxes on imports of ethanol, some foodstuffs and IT and capital goods.

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