According to businessmen, Guedes signals a reduction in IPI for industry

The Minister of Economy, Paulo Guedes, signaled this Friday (11) in a meeting with the business community a linear reduction of 25% of the Tax on Industrial Products (IPI), according to participants of the meeting and sources of the economic team. The fiscal cost is R$ 20 billion.

Guedes, however, conditioned the benefit to the debate to lower fuel prices in Congress. He said that he will only be able to help the industry if the fuel exemption is restricted to diesel.

This Tuesday (15), the Senate votes on a bill that changes the legislation on fuel. It is not yet known what will be included, but there have already been indications that President Jair Bolsonaro’s main request is to reduce taxes on diesel.

As it is a regulatory tax, the IPI can be reduced without the need to offset resources to the Treasury. This is an exception in the Fiscal Responsibility Law.

“We had already discussed with the minister the reduction of the IPI, taking advantage of the surplus of collection. Then came the increase in fuels and ran over everything. But we are resuming this conversation.” CNN Marco Polo de Mello Lopes, coordinator of Coalizão Indústria.

Sources from the economic team say that the plan is to stimulate the economy by returning part of the increase in collection to society instead of granting readjustments to servers and swelling the public machine again.

On Thursday (10), the governor of São Paulo, João Doria, announced readjustments for police, teachers and other servers. Another 19 states and the Federal District have also done the same. Doria is a pre-candidate for the Presidency of the Republic.

The cost of cutting the IPI would be shared between the federal government, states and municipalities, as the Union passes on part of the funds obtained from this tax to other entities in the federation. It is also possible that the fall in the IPI has some short-term effect to hold back inflation.