01/14/2009 10h33
Government to regulate agribusiness-specific drawback system
Valor Econômico - 01/14/2009
The government should soon regulate a new drawback method that will mainly benefit agribusiness. The system will allow, for instance, suspending the tax collection on the corn and soy used in animal feed in case the freezing plants make a commitment to export the meat. Referred to as integrated drawback, the new system foresees the suspension of the PIS/Cofins (Social Integration Plan/Social Security Financing Contribution) and IPI (Excise Tax) for inputs acquired in the country provided that the final product is intended for exportation. It is the same principle of the newly-created green-yellow drawback, but there are significant differences. In the green-yellow drawback, the company is required to import at least a small part of the inputs in order to take advantage of the benefit. The system is good only for parts, which, in practice, excluded agribusiness. Such requirements disappeared in the integrated drawback. An old demand of exporters, the green-yellow drawback was announced in May, but it only went into operation in October due to bureaucratic issues. Despite the international crisis that damaged the exports, the level of use of the benefit is considered reasonable by government and specialists. According to the Ministry of Development, US$ 2.2 billion in Brazilian exports used the green-yellow drawback system from October to the first week of January. In order to ship such amount, the companies acquired US$ 600 million in inputs: US$ 400 million in the domestic market and US$ 200 million in imports. Until the end of the year, the Ministry of Development wants to institute one single drawback system, which is currently divided into nine kinds. It is a hard task, because each type has different benefits and rules. Castro explained that the green-yellow drawback should already have covered the benefits that only now are foreseen in the integrated system, which should be available in February.
