Although tax reduction, supermarkets should not reduce price of meat

Despite the reduction of the Government of the State of São Paulo with the collection of goods circulation tax (ICMS) in sales of meat, the owners of supermarkets assesses that, in practice, the product price will not fall for final consumers.
That''s because, according to the vision of São Paulo supermarket Association (Apas), part of the impacts of the elevation of the rate this year was absorbed by retailers, who "sacrificed profit margins".
In the opinion of the entity, the effect of the decrease in the rate of VAT from 11% to 4.5% in price can be aborted with a possible increase in the price of cattle. In the first half of this year, prices retreated amid the impact of the weak flesh Operation.
Fall. On March 29, by means of Decree No. 62,843, the Government changed the rate of GST in product output to 4.5%, in view of some of the applications of the supermarket sector. The entity came in talks with the Government since December 2016, when he settled in 11% the GST on sales of the meat to the final consumer.
The new rate of 4.5% equals the situation of supermarkets to other retail formats, such as butcher shops. This equivalence was the main demand of the supermarkets, who believed that the percentage taxed previously caused an "unfair competition" between different types of retail.
With the change, the Apas retreated from the initiative to prosecute the Government of the State of São Paulo in Brazil. Despite this, the Apas says it will continue negotiating "in favor of the interest of the supermarket, charging that the tax burden is smaller and requiring greater efficiency in public spending".