March 1, 2022

08:03

Priscilla Peixoto – from Cenarium Magazine

MANAUS – The Brazilian Association of Manufacturers of Motorcycles, Mopeds, Scooters, Bicycles and Similar, (Abraciclo) released a note, on Monday, 28, in which it stands on the Linear Reduction of the Tax on Industrialized Products (IPI). The association says it supports the federal government’s initiative, but considers the linear reduction of the tax rate for products from the Manaus Free Trade Zone a matter of concern.

In a note, the association also states that such a measure will cause a sharp loss of competitiveness of the Industrial Pole of Manaus (PIM), resulting in high unemployment rates.

Also in the text, the Abraciclo highlights the existence of the counterparts required by companies installed in the PIM to use the tax benefits granted, such as compliance with Basic Productive Process (PPB), training of labor, among others.

“The Abraciclo supports the initiatives and efforts of the federal government to reduce the national tax burden, but sees with extreme concern the linear reduction in the rate of the Tax on Industrialized Products (IPI) for products from the Manaus Free Trade Zone (MFTZ) as motorcycles and bicycles. Favoring only importers, this measure will not reflect for the final consumer, because this tax is already exempted on products produced in the MFTz”, says an excerpt of the note.

“(…) would generate a large wave of unemployment throughout the production chain of the Northern Region of Brazil, because there are component suppliers, trade, services, etc., throughout the national territory,” says the note, stressing the importance of excluding the products of the MFTZ of the IPI reduction, for the maintenance of the Industrial Policy and Regional Development of the Manaus Free Trade Zone (MFTZ).

According to the association, the exclusion would maintain the competitiveness of manufactured products, encouraging the possibility of new investments and the support of jobs and income in the North Region. The note from Abraciclo ends by pointing out that, currently, Brazil is one of the largest global producers of motorcycles and the fourth of bicycles, occupying the sixth position.

“The industries installed in the Industrial Pole of Manaus (PIM) have 14.5 thousand direct employees and about three thousand temporary ones. An extremely qualified workforce, which ensures that the Brazilian motorcycles and bicycles conquer new markets and are recognized worldwide for their high added value,” concludes the document.

The decree reducing the IPI tax by 25% was published last Friday, the 25th. The news was received with concern by the Amazonians and, in the reading of the Amazonas caucus in the Federal Congress, the decision should negatively impact the Manaus Free Trade Zone.