Cosmetics manufacturers want to talk with the Government on tax increase

The cosmetic manufacturers want to discuss with the federal Government the implications of increased tax burden the sector announced the day before, said on Tuesday the entity that represents the industry.
The Government announced on Monday that it will change the procedure for charging the tax on industrialized products (IPI), equating cosmetics wholesalers industrial producers, with no increase in tax rate. The measure incorporates the latest package of tax changes designed to raise revenue by more than 20 billion reais in 2015.
"The industry wants to have the opportunity to show that the implications of the measures announced by the Government, if applied, will harm the economic performance of this industry," said Joao Carlos Basilio, President of Associação Brasileira da Indústria de personal hygiene, perfumery and cosmetics (ABIHPEC) in note.
According to Analyst William Ahmed, the broker Brazil Plural, the Government will try to achieve taxation measure on the distribution of products, doing away with tax planning that allowed companies to pay less taxes.
"The impact is difficult to measure, the Government has not disclosed the memory calculation, so we need to have some more details," he said.
In a note to clients, the Broker Elite scored that many producers currently open companies, wholesalers who pay less taxes, to sell their products at lower prices--a maneuver that would be barred by the new measure.
In a statement, the Government said the onslaught "equalizes the taxation along the chain of production and distribution of this sector, avoiding that induces margin buildups accented at the end of this chain".
According to the Ministry of finance, it is expected an impact on collection of 381.41 million reais this year, starting in June. For a full year, the amount is estimated at 653.85 million reais.
The action of the cosmetics manufacturer Natura closed stable this Tuesday-feria, after retreating almost 3 percent in early trading, while the role of consumer company Hypermarcas closed in fall of 0.23 percent, after falling 1.3 percent.