BRASILIA (Reuters) – Brazil’s government announced on Monday a new 10% reduction in the tax rate for import goods on a large part of products purchased abroad, aiming to reduce inflationary pressures.
The economy ministry’s tax cut, which covers approximately 87% of the country’s tariff goods, was approved after a meeting of the Brazilian Foreign Trade Chamber late on Monday.
A source had previously confirmed the information to Reuters.
“Today’s measure, added to the 10% reduction already made last year, brings the Brazilian tariff level closer to the international average and, in particular, to the countries of the Organization for Economic Cooperation and Development (OECD),” the Secretary of Foreign Trade, Lucas Ferraz, said in a note to the press.
In November last year, the government had already unilaterally reduced the common external tariff (TEC) rates by 10%, without the approval of all Mercosur members, saying it was urgent to deal with rising prices.
In April, the government showed its intention to promote a new 10% cut in import tariffs.
The country’s economy ministry backs a gradual opening of the economy and recently implemented cuts in the industrial tax (IPI) to increase competitiveness of the country’s industry and to enable the new reduction of the import tax.
An initial reduction of 25% in IPI was increased to 35%, preserving products from the Manaus Free Trade Zone. The measure, however, was taken to court and currently is partially suspended.
(Reporting by Bernardo Caram in Brasilia; Writing by Carolina Pulice; Editing by Marguerita Choy and Matthew Lewis)
