Wednesday, September 02, 2015

Change in taxation raises pressure on beverage and electronics sectors

The change in taxation on spirits and computers, tablets and smartphones must raise the cost pressure in the industry and can, therefore, discourage the demand for these products, assess representatives of those sectors.
The changes were announced yesterday by the Government's economic team, during the presentation of the budget proposal for 2016, and aim to raise Federal Revenue Collections. The measures shall enter into force on the 1st of December, according to provisional measure (MP) 690, published in special edition of the Official Gazette of Monday (31).
Among the proposed changes, the Government revoked the exemption of PIS/Pasep and Cofins for sale of computer equipment (desktop computers, notebooks, tablets, smartphones, modems and routers) in retail, benefited by the law of the Well since 2005.
"With the Elimination of the effects of the Digital inclusion program contained in the law of right, the Government opts for back of informality in the economy, with the decline of formal jobs and of the collection of other taxes in jail," said the President of the Brazilian Association of electrical and Electronics Industry (Abinee), Humberto Barbato, in a note sent to the press.
In addition, the prices of the products can be adjusted according to the order of exemption, as suggested by Barbato. In a note, he states that the exemption of taxes was fully passed on to consumers by reducing the prices of products, since the industry continued collecting the PIS/Cofins.
The increase in taxation occurs at a time when the production of computers, electronics and optical products registers 27.8% fall in the year to June compared with a year earlier, according to the Brazilian Institute of geography and statistics (IBGE). The production of communications equipment-which includes cell phones-fell 13.9 percent in the same comparison.
Nevertheless, the IRS explained that the tax incentive is no longer justified more, because in recent years the prices of these products have undergone substantial reduction.
The MP 690 can also change the model of taxation the tax on industrialized products (IPI) on hot drinks, such as wine, whiskey, rum and liqueurs.
Currently, the sector has a ceiling to the incidence of the tax per liter of drink produced. The new model provides for the calculation of the IPI in aliquots ad valorem with a percentage of the value of the products.
"In addition to bringing proportionality of taxation at price, [the change] also equates the Distributor and importer industrial taxpayers," says the recipe in a statement sent to the press. With the new model, the Government is expected to raise $ 1 billion more next year.
To the Executive Director of the Brazilian Wine Institute (Ibravin), Carlos Paviani, it is too early to calculate the impact of change in the sector and indicate alternatives to the domestic manufacturers absorb tax increases.
"Our industry, different from most of the industry is going through a good moment, with high demand. But the tax increase can negatively impact the business, since it has direct reflection on the price of the products, "he says.
According to the IBGE, the accumulated production of alcoholic beverages in the country-which includes cold drinks-backed down 8.3% until June over a year earlier.
The Brazilian Association of drinks (Abrabe) chose to wait for more details before you place on change. Already the Ibravin concentrated efforts on adherence to simple.
"As of Wednesday we will begin to assess the ramifications of the change, but this Tuesday [1] our focus is the inclusion of the wine sector in the national simple," said Paviani, which defended the election in the House of representatives, in Brasilia. According to him, the inclusion of small and medium-sized in the tax regime should benefit the formalization of a thousand producers.
The tax burden of the textile sector also suffered changes. President Dilma Rousseff vetoed a section of the Act amending the exemption on the payroll in 56 sectors, as extra Edition Official Gazette yesterday. The veto withdraws the forecast of differentiated taxation on the textile industry.
The law also raises the rates for the tax calculation sheet about companies ' gross revenues. As reported by Brazil yesterday, the law of elimination of payroll was approved in August by the Senate, after months of negotiation. The law was the last measure provided for in fiscal adjustment that depended on the Federal Congress for approval.
The exemption of payroll was established in 2011 by the Government and, in 2014, accounted for $ 22 billion in tax waiver. The new law raises the current rates of 1% and 2% in most sectors to 2.5% and 4.5%, respectively. The new tax goes into effect on December 1.
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