Paraná changes tax rules to contain imports of powdered milk

The Government of Paraná has recently taken two decisive measures to shield the state’s dairy producers from the increased competition posed by imported powdered milk and mozzarella cheese. These actions involve amendments to the regulations overseeing the Tax on Circulation of Goods and Services (ICMS), a response to industry demands to safeguard local production in light of a substantial surge in powdered milk imports since 2022.

Firstly, the government issued Decree 5,396/2024, altering the tax treatment applied to both products. Additionally, a bill has been forwarded to the State Legislature to revise the ICMS legislation (State Law 13,212/2001) concerning international purchases of powdered milk and mozzarella cheese.

Previously, the importation of inputs used in production processes benefited from a complete suspension of ICMS. However, under the modified regulations, both powdered milk and mozzarella cheese imports are now subject to a 7% ICMS tax. This adjustment ensures that imported dairy products are taxed at a minimum rate, given their classification as staple household items, and therefore cannot be subjected to the full rate of 19.5%. Notably, these new regulations will affect major importers of these products in Paraná.

Furthermore, the decree eliminates the entitlement to the 4% ICMS presumptive credit benefit for these dairy products. The removal of this fiscal incentive, which allows for the deduction of ICMS from other credits, underscores the government’s commitment to addressing the challenges faced by local producers in the dairy sector.

A key focus of these measures is to regulate imports from Mercosur countries. According to Agrostat, the Ministry of Agriculture and Livestock’s platform tracking agricultural trade, Paraná imported 6.5 thousand tons of powdered milk last year, amounting to $24.6 million. Among these imports, 2.8 thousand tons originated from Argentina, costing $10.9 million, with a similar volume sourced from Uruguay at $10.8 million. Additionally, 800 tons were imported from Paraguay, totaling $2.8 million.

This significant increase in imports, up 183% from 2022, underscores the urgency of the situation. In response to mounting pressures on local producers, the government has underscored the need to safeguard the interests of the dairy industry, a vital economic sector comprising tens of thousands of families across Paraná.

Notably, Paraná ranks as the second-largest milk producer in Brazil, with 3,626,378 liters delivered to dairies in 2023. This underscores the importance of implementing measures to protect the livelihoods of local producers and ensure the sustainability of the dairy industry in the region.

Furthermore, the Department of Agriculture and Supply, in collaboration with industry stakeholders, has proposed additional measures to support farmers, including the postponement of loan payments and debt refinancing, particularly for family farmers. This holistic approach aims to bolster the resilience of the agricultural sector and foster a conducive environment for sustainable growth and development.

Source: Portal Juína Mais

Click here to read the original news article: https://juinamais.com.br/parana-muda-tributacao-para-conter-importacao-de-leite-em-po/

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