Government suspends PIS/COFINS on corn imports until December 31

The federal government has suspended the collection of PIS and COFINS taxes from corn imports until December 31. The objective is to demonstrate the cost of external acquisition in order to focus on increasing internal supply to reduce price pressure and costs for livestock breeders since the grain is an essential input in feeding bovine animals, pigs, and birds.

The measure appeared as provisional measure No. 1,071, published on Thursday (Sept6. 23). It was proposed by Minister Tereza Cristina (Minister of Agriculture, Livestock, and Food Supply) to compensate for the decreased corn production due to drought. The reduced supply caused corn prices to soar, increasing costs for animal breeders.

According to the provisional measure, PIS and COFINS taxes are zeroed until December 31, 2021, for corn imports. The provisional measure shall enter into force on the fifth working day after the date of its publication.

The suspension will allow the purchase of corn from other markets outside Mercosur, improving the internal supply and avoiding a readjustment in meat prices for the consumer. The expectation is that removing the tariff will reduce the import cost by 9.25%, or R$ 9 per bag.

According to the most recent CONAB survey (September), inclement weather has caused the national 2020/2021 corn crop forecast to fall to 85.7 million tons, a reduction of 16.4% compared to the previous cycle (102.5 million tons).

Another measure taken recently by CAMEX (the foreign trade chamber) was the suspension of the 8% common external tariff (TEC) on corn until the end of this year and the facilitation of purchases of genetically modified corn cultivated in the United States. Both normatives were proposed by the Ministry of Agriculture.

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