Lower IPI is a buffer to the surge in commodities, says industry

The rise in energy commodity prices after the war between Russia and Ukraine should be dampened, in the final price of products, by a 25% cut in the rates of the Tax on Industrialized Products (IPI).

The assessment was made this Monday (7th) by businessmen from Coalizão Indústria, a group that brings together different sectors of the manufacturing industry, after a meeting at a hotel in São Paulo.

According to industrialists, the measure has a positive impact not only by reducing the tax itself, but also by relieving the cost of financing companies’ working capital.

The trend, they observed, is for these gains to be passed on to the consumer, especially in markets with greater competition.

Coordinator of Coalizão Indústria, in addition to executive president of Instituto Aço Brasil, Marco Polo De Mello Lopes classified the tax reduction as a fair, courageous and necessary measure at a time when global inflation is pressured by the supply shock resulting from the crisis in the eastern europe.

He added, however, that the industry will continue to charge a greater cut of 50% of the IPI. “Our expectation was 50%. It is part of our claim to move forward with a greater reduction”, said the executive.

According to industrial leaders, the ability of factories to pass on the surge in raw materials – especially oil, gas, coke, coal and electricity – will vary in each market.

Anyway, José Roriz, president of Abiplast, the association that represents the plastic industry, evaluated that the cut in the IPI will help to mitigate this high. “It comes at a good time, it is an extremely timely measure”, he commented.