São Paulo – Business owners, sector associations and Brazilian government officials formed a working group to create the tax regime Simples Internacional, which has as its main goal to cut red tape and streamline exports by small and medium-sized companies. The project will be based on the Simples Nacional, a tax system that unifies and reduce taxes to facilitate operations of small businesses.
The president of the Brazilian Micro and Small Business Support Service (Sebrae), Guilherme Afif Domingos, said to ANBA that the Simples Internacional is based on the text of a supplementary law approved in 2014 that guarantees to micro and small businesses access to the foreign market through simplified processes of license, permit, foreign exchange and customs.
Brazil has nearly nine million micro and small businesses, which account for approximately 25% of the Gross Domestic Product (GDP). Businesses with annual revenues of up to BRL 360,000 (USD 98,000) are classified as micro, while those with annual gross revenues of up to BRL 3.6 million (USD 980,000) are classified as small businesses.
“It’s not just about tax simplification, which certainly is the most complex. They are simplification actions on logistics, red tape and payment methods that cause an impact in exports for small entrepreneurs”, said Afif.
Still according to Sebrae’s president, the new regime aims to regulate the international and integrated logistics operator, which hasn’t taken place yet. This operator will be responsible for all the small exporter red tape procedures. The operator will handle permits, customs, insurance, foreign exchange, cargo consolidation, transport and storage. Measures such as this one should help, for instance, with the delivery of goods sold via web.
Currently, it’s possible to export through the project Exporta Fácil by the Brazilian Post Office (Correios). But it has limitations that should be overcome with the regulation of the logistics operator. By the program, for instance, shipments can’t exceed USD 50,000. Afif pointed out that red tape and costs are currently the main obstacles to the exporter and that the new regime will fight them. However, there are more. “To access foreign markets requires businesses to have management, innovation and technological skill to compete beforehand”, he said.
At first, said Afif, the project’s goal is to ensure that simplifications take place within the domestic territory so the companies can achieve better access to the foreign market. Measures taken in partnership with other countries should come in a second phase. In this project, Argentina has priority for being a large trade partner of Brazil.
“Bilateral negotiation is the second step. After facilitating the domestic process, it’s necessary to ensure that the special treatment is also applied on the other side of customs. We plan to start this negotiation process with Argentina, an important trade partner of Brazil. I already held talks with Argentina’s ambassador, who found it to be an interesting project and was open to the proposal”, said Afif.
Now the proposal of the Simples Internacional will be submitted to Congress. The working group that formulated the proposal included the Ministry of Industry, Foreign Trade and Services, the Federal Revenues Service, the Secretariat of Micro and Small Business, Central Bank, Brazilian Trade and Investment Promotion Agency (Apex-Brasil), National Federation of Industry (CNI) and the National Commerce Federation for Goods, Services and Tourism (CNC). The group is coordinated by the Foreign Trade Chamber, an agency linked to Brazil’s Ministry of Foreign Affairs (Itamaraty).
*Translated by Sérgio Kakitani
