March 8, 2022

08:03

Eduardo Figueiredo – Cenarium Magazine

MANAUS – The National Confederation of Municipalities (CNM) disclosed, in a statement, on Monday, 7, that the municipalities of the Amazonas will have losses of R$ 253.1 million, between the years 2022 and 2024, after the reduction of the rate of the Tax on Industrialized Products (IPI), by the federal government.

The president of CNM, Paulo Ziulkoski, pointed out that the measure of Jair Bolsonaro’s (PL) government “repeats the old habit of making charity with other people’s hat”.

With the reduction of the IPI by 25%, the estimate is that the annual losses of the Amazon municipalities, for the next three years, will be: R$78.2 million (2022), R$83.8 million (2023) and R$91.1 million (2024).

“As the IPI makes up the basket of taxes shared with the municipalities, being an important part of the Municipal Participation Fund, the measure will cause budgetary imbalance”, says the note.

Shared Taxes

Because it is a policy that seriously harms the federative pact, the CNM denounces the reduction of shared taxes, usually used by all governments, but with great losses to the municipalities, including in the cost actions and social investments.

According to the decree published by the Ministry of Economy, a reduction in the collection of this tax is estimated to total R$ 19.5 billion by 2022. As the municipalities hold 24.75% of this resource, the loss in the Municipal Participation Fund (FPM) will be R$ 4.826 billion. The amount represents about 40% of one month’s FPM transferred to all 5,568 municipalities.

In this context, the CNM highlights that “it will reinforce its actions in the National Congress, in order to approve matters that impose on the federal government measures to compensate for the effects of these reductions”.

Impacts on the ZFM

Published on the 25th, in the Official Journal of the Union (DOU), the decree that allows the reduction of up to 25% in IPI rates directly affects imported products and those produced in the Industrial Complex of Manaus (PIM). The act signed by President Jair Bolsonaro and the Minister of Economy Paulo Guedes, caused insecurity in entrepreneurs and workers in the Manaus Free Trade Zone (MFTZ).

Read also: ‘Electioneering’: election law expert says Bolsonaro’s decree reducing IPI is unconstitutional

President Jair Bolsonaro said the Free Trade Zone will not be harmed. Without presenting technical basis, Bolsonaro said that “everyone will feel improvement with the decree”. Bolsonaro also said that they “alarmed” the situation. “The Free Trade Zone will not be harmed, in our understanding, they did all this to wear me down. All the time, they just hit me…”, he said.

Future of the FTZ

This Tuesday, 8, the governor of the state of Amazonas, Wilson Lima, and members of the Congressional Caucus will meet with technicians from the Ministry of Economy to discuss a way out. One of the solutions to be put on the table will be the publication of a new decree establishing that all industries subject to the Basic Productive Process (PPB) would have presumed credit equivalent to the comparative advantage lost with the reduction of IPI. The measure would safeguard the MFTz and maintain the benefit to other industries in the country.

Read also: Governor of AM, Wilson Lima exposes concern with the reduction of IPI: ‘I will fight to revoke it’