Brasília – Tomorrow (5th), the Brazilian Ministry of Finance is going to announce an export stimulus package. The sector is facing problems as a result of the financial crisis that shook the world and slowed down the markets. The announcement will be made during the meeting of the Growth Follow-Up Group (GAC, in the Portuguese acronym) that comprises government and society representatives.
The main proposal is to speed up the return of taxes charged on raw materials that the government should give back to the exporters, as taxes cannot be exported. Companies complain that the government keeps the funds in the Treasury and takes years to return them.
The minister of Finance, Guido Mantega, did not confirm, however, whether the measures provide for a reduction of taxes for the exporting sector, even though the matter was discussed during the package’s elaboration.
Another proposal is the establishment of the Ex-Im-Bank, an institution meant to encourage foreign trade. The Ex-Im-Bank, whose creation was being considered for years, has a more modest structure than previously imagined. Initially, the institution will have funding from already existing export financing lines of the Brazilian Development Bank (BNDES).
The government should also announce that revenues from exports will not be included in the revenues of micro and small businesses, so that they do not exceed the revenue range of the single tax system for micro and small businesses (Simples), which is 240,000 real (US$ 138,000) per year for micro businesses and from 240,000 to 2.4 million real (US$ 138,000 to US$ 1.38 million) for small ones.
Another proposal is for a public export credit insurer to be established. Measures might be included in order for domestic products to have priority in government purchases.
The accelerated growth of the current account deficit has been causing concern, especially after the world crisis, which is still affecting the Euro Zone countries.
For the sake of illustration, last year, the Brazilian current account deficit, one of the main foreign trade indicators, was US$ 24.334 billion, equivalent to 1.54% of the Gross Domestic Product (GDP). For 2010, the Central Bank forecasts a deficit of US$ 49 billion (2,53% do PIB).
*Translated by Gabriel Pomerancblum
