Brazil’s fiscal auditors protest wreaks havoc on corn export payments

Corn exporters have faced delays of up to seven days in obtaining the documents necessary to invoice payments for the product shipped due to the ongoing work-to-rule protest of fiscal auditors from the Brazilian Federal Revenue Service, according to information from the National Association of Cereal Exporters (Anec).

The issue has been plaguing the industry since the beginning of the year, when soybean exports were at their high. Still, the entity’s director-general, Sérgio Mendes, feels the situation is worse now.

Brazil is amid the harvest of corn’s second crop, with production approaching what could be a record, raising the level of exports.

See below the track record of corn exports from Brazil from January 2020 to May 2022. Data are from DataLiner.

Corn exports from Brazil | January 2021 – May 2022 | WTMT

Source: DataLiner (click here to request a demo)

“The situation is deteriorating rapidly… companies plan ahead to receive their payments in specific cays. When that does not happen, they resort to costly alternatives to find ways to hand the required documents for imports,” said him.

According to him, the tax auditors of the Revenue Service are in charge of issuing documents at airports that must be physically handed to importers in the country that purchases the product via a carrier. Payments are only granted after these documents are delivered.

The main bottlenecks are located at the airports of Viracopos, in Campinas (SP), and Cumbica, in Guarulhos (SP), where documents are physically delivered.

With the delay in the processes in Brazil, Mendes said that exporting companies are sending employees to Argentina so that the documentation is dispatched from airports there.

“We estimate that corporations need to make 20 voyages to Argentina every month,” he said.

When grain shipping destinations are closer to Brazil, exporters sometimes deploy inside workers to present the documentation that releases the payments. According to Mendes, this produces additional expenditures that were not originally anticipated.

“We cannot claim a loss, but you significantly disorganize the firms’ cash,” he continued.

According to the association, a ship loaded only with corn is worth around 20 million dollars. If there is a delay of seven days in the payment documentation, the amount ceases to enter the company’s cash register.

Mendes also warned that the number of agricultural tax auditors who issue phytosanitary certifications is insufficient and that when more maize and cotton arrive for export, particularly in the port of Santos (SP), it will become a documentation release bottleneck.

Dialogue

The director of Anec stressed that the problem is not in the fiscal auditors themselves, and some of the professionals do their best to collaborate with companies, but in the guidelines defined by the category and in the work-to-rule protest as a whole.

The president of Sindifisco Nacional de Santos, Elias Carneiro, regretted that the situation came to its current aspect. He mentioned that inspectors plan to “alleviate” a little the thoroughness of international trade processes given the numerous complaints from importers.

However, the category will remain mobilized indefinitely until representatives of the federal government open an opportunity for some dialogue, which, according to him, did not take place this year.

“We’ve been trying to get a regulation going since 2016. In fact, this year, the government didn’t even open a dialogue channel with us… we are also planning a big demonstration for August 16,” he told Reuters.

According to Carneiro, the protester’s central claims are the expansion of the workforce, salary budget readjustment, and productivity regularization for inspectors.

The Economy Ministry did not immediately respond to a request for comment.

Source: Isto É Dinheiro

To read the full original article, please go to: https://www.istoedinheiro.com.br/protesto-de-fiscais-da/

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