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IPI Tax Reduction Does Not Hurt Electoral Law: Guedes

BRAZIL

Brazil: Local markets closed for Carnival holiday.

  • Government reduced the IPI tax by 25% for all industrialized products except for tobacco and will lose 20b reais in revenue per year, according to an extraordinary publication in the Official Gazette.
    • Of this amount, 10b reais comes from the federal government and 10b reais from states and cities.
    • Economy Minister Paulo Guedes told reporters in Brasilia that the decision does not hurt the electoral law. (BBG)
    • “IPI tax reduction is the beginning of Brazil’s reindustrialization,” Guedes said to defend the measure
  • Additionally, Guedes told reporters the economic team is working on carbon credit program to be announced after Carnival.
  • Government plans to announce a program to swap IPI tax credits for carbon credits.

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