Companies released from IPI on inputs used in products aimed at foreign market
Valor Econômico 04/03/2009
The exporting companies will be exempted from the payment of Excise Tax (IPI), PIS/Pasep (Social Integration Program/ Public Workers Fund) and Cofins (Social Security Financing Contribution) on the purchases made in the domestic market or in the import of inputs, provided that such inputs are used in the industrialization or manufacturing of products to be exported. The "integrated drawback", the new tax system that will benefit the exporting companies in general, including those operating with agribusiness products, was regulated by a Joint Ordinance of the Ministry of Industry and Commerce and the Federal Revenue Service, published yesterday in the "Official Federal Gazette". The measure takes effect within 45 days.
For the Secretary of Foreign Trade, Welber Barral, this is a great achievement for the exporting agribusiness sector. "This segment of the economy contributes a lot for the performance of the Brazilian trade balance and it will now be able to take advantage of a system that will reduce the incidence of federal taxes on the exported goods", he emphasized. Barral analyzed the relevance of the measure at a time of economic crisis. "In view of the current setting of reduction of the world demand, the cooperation of the Federal Government in order to increase the competitiveness of our products in foreign markets is crucial". The most benefited sectors will be poultry and hog raising, fruit, cotton, wines, honey, dairy products and others using corn, soy, animal feed, medicines and packaging and other inputs of the productive process. Companies and cooperative corporations will be exempted from the payment of the taxes listed in the Ordinance. Currently, they pay and wait for a later refund. The new system will represent a relief in the cash flow to the extent of the cost of production of each segment. The percentage of the PIS/Cofins is 9.25% and IPI, 5%.