MercoPress. South Atlantic News Agency

Brazil's Economy Minister in favor of taxing the wealthiest

Guedes sees the move would help his country become a world power

Brazil's Economy Minister Paulo Guedes Monday expressed his approval to apply an income tax on the extra wealthy citizens in exchange for easing down on collections levied on enterprises, it was reported.

“The time is now. We have already approved this reform in the House [of Deputies], it is stuck in the Senate. We can make a leaner version, taxing the super-rich and reducing the tax on companies,” said Guedes during the presentation of a new tool to monitor investments in the country.

Guedes also favored ending all taxation on industry ”to allow Brazil, which has all the raw materials, to be a world power. He said that the government is already following this path, and mentioned the reduction in the Tax on Industrialized Products (IPI), promoted via decrees published at the end of last month.

The minister's statement came after Supreme Federal Court (STF) Justice Alexandre De Moraes suppressed part of the IPI reduction last Friday at the request of the Solidarity Party, which maintained that the IPI reduction nationwide for products that are also produced in the Manaus Free Trade Zone would harm the competitive advantage and development of the region.

Moraes temporarily suspended the IPI reduction for all products that are also produced in the Manaus Free Trade Zone, where a differentiated tax regime, protected by the Constitution, is in force. This includes items such as shoes, TVs, stereos, furniture, toys, and others.

“The reduction in rates in the manner provided for by the impugned decrees, without the existence of compensatory measures for production in the Manaus Free Trade Zone, drastically reduces the comparative advantage of the center, thus threatening the very persistence of this constitutionally protected differentiated economic model,” De Moraes argued.

The Investment Monitor was launched Monday in partnership with the Inter-American Development Bank (IDB) and financial support from the UK government, through a fund dedicated to sustainable development. Data and projections about the Brazilian economy and development plans for sectors such as infrastructure, energy, connectivity, and sanitation are available on the platform. The idea is that the tool will provide details and an assessment of the sustainability of all existing public-private partnership projects in Brazil.

“The platform will gather relevant information for investors about each project available, data from the historical series, social aspects, environmental aspects, expansion plans, and all the necessary information to help illustrate not only investment projections but also to provide subsidies for decision making,” explained Productivity and Competitiveness Secretary Daniella Marques. (Source: Agencia Brasil)