Government publishes decree to establish IPI reduction without products from the Manaus Free Trade Zone, says Economy | Economy

The government published, in an extra edition of the “Official Gazette”, a decree that defines for which items the 35% reduction in the rate of the Industrialized Product Tax (IPI) is valid. The decree also excludes from the list the main products that are manufactured in the Manaus Free Trade Zone, according to the Ministry of Economy.

The decree, according to the folder, meets a determination of the Federal Supreme Court (STF). In May, Minister Alexandre de Moraes suspended the tax reduction for products that are also manufactured in the Manaus Free Trade Zone.

Manaus Free Trade Zone will be spared from IPI Reduction

Manaus Free Trade Zone will be spared from IPI Reduction

Moraes accepted a request from the Solidarity party. The acronym argued that reducing the IPI for products from all over the country that compete with the Free Zone reduces the advantage of articles from Manaus, which already have exemption. This, according to Solidarity, affects the development of the region and environmental preservation.

According to the Economy, the decree provides legal certainty for the reduction of the IPI.

“By detailing the products that will have their rates changed, the new edition clarifies the correct application of the IPI on the invoicing of industrialized products, guaranteeing legal certainty and the advancement of tax relief measures. The text also presents specific treatment to preserve practically the entire effective production of the ZFM”, stated the Economy in a note.

The Manaus Free Trade Zone brings together industries of different types of products. Household appliances, vehicles, motorcycles, bicycles, TVs, cell phones, air conditioners, fitness equipment and computers, for example, are manufactured in the region.

The new decree also updates the reduction in the IPI rate for cars, which goes from 18% to 24.75%.

Since the beginning of the year, the government has been lowering the IPI rate for several products, until it reached a reduction of 35%.

The idea, according to the ministry, is to revitalize the industry and boost the recovery of the economy.

“The decree will have a positive impact on the Gross Domestic Product (GDP), with the reduction of the Brazil cost and greater legal certainty. It is expected to increase the competitiveness of the industry, with less taxes and increased production”, wrote the ministry.

The government calculates that the reduction of the IPI for the items provided for in the decree will reduce the collection by R$ 15.57 billion in 2022.

For the Center of Industry of the State of Amazonas (CIEAM), the decree does not meet the determination to exclude products that are also manufactured in the free zone.

“In a superficial analysis, we identified points that can bring losses to some segments of the Industrial Pole of Manaus”, said the entity.

CIEAM also said that it understands that the suspension imposed by Minister Moraes should still be in effect.

“It seems to us that, until there is a new manifestation of the STF, the precautionary measure that preserves the Industrial Pole of Manaus is maintained.”

According to the government, the new decree will come into force as soon as it is published in the “Official Gazette”.

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