Government forecasts cut in import tariffs on industrial products

According to a report published by the newspaper Valor Econômico, Jair Bolsonaro’s government’s economic opening plan foresees a unilateral cut in import tax rates on industrial products from 13.6% to 6.4% on average over four years – which would leave Brazil with levels of industry tariff protection equivalent to those of the richest countries in the world.

The newspaper should have access to a simulation conducted by the Brazilian government and shared with other Mercosur partners to reduce the Common External Tariff. According to the simulation, the rates applied to passenger cars brought from abroad should fall from 35% to 12%. It would also reduce from 35% to 12% the tariff charged on textiles and clothing. In a time of oversupply and global overcapacity, hot rolled steel would fall from 12% to 4%. Buses would go from 35% to 4%. Polypropylene would fall from 14% to 4%.

According to Valor, by the proposal it that had access to, the cut of various sectors of the manufacturing industry could go far beyond 50% of the import tariff practiced today. Meanwhile, agribusiness would be left with virtually unchanged rates.

The document was presented to the “Ad Hoc Group to Analyze CET’s Consistency and Dispersion” and has not yet received a response from the other members of the bloc – Argentina, Uruguay, and Paraguay.

There are aliquot suggestions for 10,270 NCMs, as common Mercosur nomenclatures are known. Each NCM covers a specific product or a small category of products. The study predicts a reduction in CET for footwear (31.8% to 12%), medical equipment (11.2% to 3.8%), furniture (17.6% to 8.8%), plastic products (10.8% to 4.8%), steelmakers (10.4% to 3.7%), electrical machinery, and equipment and appliances (12% to 4.2%).

Source: Valor

Sharing is caring!