Brazil’s Gecex has temporarily lifted import taxes on nine food items, including beef, coffee, and olive oil, to combat inflation. The tax rates will drop to 0% effective Friday, with some measures lasting only for a specific time. This initiative is expected to impact the economy by about US$ 110 million annually, though the effect is considered temporary.
In a significant move to mitigate inflation, Brazil’s Chamber of Foreign Trade’s Executive Management Committee (Gecex) has authorized the temporary removal of import taxes on nine food items. This exemption applies to products such as boneless frozen beef, roasted and unroasted coffee beans, corn designated for consumption, specific types of uncooked pasta, cookies, extra virgin olive oil, crude sunflower oil, cane sugar, and preserved sardines, limited to 7,500 tons. Tax rates previously ranging from 7.2% to 32% will be reduced to 0% effective Friday, aiming to alleviate local consumer prices.
The list of food items benefiting from the zero tariffs is classified according to the Southern Common Market (Mercosur) Nomenclature (NCM) codes, which delineate nine types of food categorized into ten NCMs. Notably, this reduction includes both roasted and unroasted coffee products. Brazilian Vice President and Minister of Development, Industry, Trade and Services, Geraldo Alckmin, confirmed that this tariff reduction would commence on Friday, when the Camex resolution will be published in the Federal Official Gazette.
For sardines, it is essential to note that the zero tariff applies solely to an allocated import quota of 7,500 tons. Furthermore, as per last week’s announcement, the import quota for palm oil has been raised from 60,000 to 150,000 tons for the next 12 months, maintaining a 0% import tax rate. Alckmin projected that the overall financial impact of the zero tariff would amount to approximately US$ 110 million annually. However, he anticipated the actual fiscal damage would be minimal due to the transient nature of these measures, asserting, “As I expect [the zero import tax] to be more transitory, the impact should be less.”
In summary, Brazil’s recent decision to lift import taxes on various food items aims to combat inflation and reduce consumer prices. While the initiative has financial implications, including a projected annual impact of US$ 110 million, the temporary nature of the measure suggests a calculated approach to alleviate economic pressures without substantial long-term losses.
Original Source: en.mercopress.com
