IPI reduction may have an impact of about R$ 16 billion for states

The coordinator of the National Forum of Governors, Wellington Dias, estimates that the increase in the percentage of reduction of the IPI (Tax on Industrialized Products) can generate a fiscal impact for the federation units of around R$ 16 billion.

Last month, the federal government announced a 25% reduction in the tax, an impact estimated at R$10 billion for state governments. Last Thursday (24), however, the Minister of Economy, Paulo Guedes, reported that the fall will be extended to 33%.

This week, the National Forum of Governors announced that it will file a request with the Federal Supreme Court (STF) to prevent the measure, evaluated by the group of state managers as unconstitutional, because it was not discussed with the National Congress.

In February, the Minister of Economy had said that the percentage of 25% would not be increased either in 2022 or in 2023 so as not to harm the Manaus Free Trade Zone, which currently benefits from the tax exemption.

The minister explained, at the time, that he came to evaluate a linear reduction of 50%, but that he opted at this moment for a smaller percentage with respect to the productive region of the North region.

“The 25% reduction in the IPI is the mark of Brazilian re-industrialization after four decades of de-industrialization”, he said. “From now on, it’s a reduction. But it has to take responsibility with the Manaus Free Trade Zone”, he added.

The minister’s retreat has been criticized both by state managers and by congressmen from the North Region, for whom the measure has the potential to economically harm the northern states.

wanted by CNN Brazilthe Ministry of Economy did not disclose its budget impact estimate.