Wellton Máximo          Reporter Agência Brasil

Brasília – As part of its new Greater Brazil Plan (“Plano Brasil Maior”), the government will surrender R$20.7 billion in various types of revenue from the industrial sector.

The biggest impact on the government’s cashbox will be a speeded up return of reimbursements of the PID/Cofins tax payments on purchases of capital goods. At the moment, repayment takes 12 months. That period of time will gradually be reduced to zero. As a result, the government will surrender revenue of R$300 million this year and R$7.6 billion next year.

Another similar measure, accelerated repayment of export taxes on manufactured goods will mean a surrender of R$7 billion in tax revenue in 2011 and R$5 billion in 2012.

Reductions in payroll taxes on companies manufacturing footwear, furniture, textiles and software will mean a loss of R$1.6 billion in revenue for the government over the next two years (R$200 million this year and R$1.4 billion next year). Instead of a tax levied on the payroll, these sectors will be taxed based on their sales income.

According to the executive secretary at the Ministry of Finance, Nelson Barbosa, depending on results, the measures may be extended to other sectors of the industrial segment. Initially the government intends to keep the tax reductions in place until the end of 2012. Barbosa explained that some measures will require appropriate legislation, such as changes in tax rules for the automobile industry. And a new tax regime will favor companies that invest in technology and purchase parts and components made in Brazil.

Allen Bennett – translator/editor The News in English

Link - Fazenda corrige valor da renúncia fiscal com desoneração da política industrial; governo vai abrir mão de R$ 20,7 bi