New decree excludes Manaus Free Trade Zone from IPI cut, informs Ministry

The Ministry of Economy published on Wednesday afternoon (24) a new decree that maintains the IPI reduction at 35% for most industrialized products manufactured in Brazil. However, the main products manufactured in the Manaus Free Trade Zone in accordance with the so-called Basic Production Processes (PPB) are maintained without IPI reduction throughout the country.

According to the ministry, the decision preserves the competitiveness of products from the Manaus Free Trade Zone (ZFM), as it maintains the IPI tax rates for 109 products manufactured in the ZFM. The products add to the 61 already listed in the Decree No. 11,158of July 29, 2022, adding up to 170 products from the Manaus Free Trade Zone with restored rates, for the purpose of complying with judicial decisions, informs the Ministry of Economy.

“This new list was the subject of intense negotiations by the Superintendence of the Manaus Free Zone (Suframa), with the main regional actors, in order to put an end to the legal uncertainty caused by the judicial decisions. The impacts that the tariff reduction could cause on the regional development model defined by the Federal Constitution for the ZFM are excluded. This model ensures the differentiated treatment of the region as compensation for the higher costs arising from the challenges faced by the local industry”, says the Ministry in a note.

The measure, which comes into force on the date of its publication, complies with a court decision and ends the legal uncertainty of the national productive sector, reinforces the portfolio. In a press conference for journalists this Wednesday, the Ministry of Economy team clarified some points of the new decree.

The executive secretary of the Ministry of Economy, Marcelo Guaranys, said that the new decree is “an attempt to reduce the IPI and link it with the decisions of Minister Alexandre de Moraes”.

Earlier this month, the Supreme Minister had suspended Decree 11,158, edited by the federal government on July 29, which specified the products manufactured in Brazil that would have a 35% reduction in IPI. Moraes determined that the reduction does not apply to products competing with those produced by industries in the Manaus Free Trade Zone that have a valid Basic Production Process (PPB).

At the press conference, Guaranys said that there will be 170 products whose rates must be “re-established to the level, or remain at the original level since the first reductions in February this year”. Among the products, the secretary mentioned the soda concentrate syrup, which is also relevant in the production of the Free Zone.

In addition to the executive secretary, the special secretary for Productivity and Competitiveness, Alexandre Ywata, the undersecretary of Taxation and Litigation of the Federal Revenue, Fernando Mombelli, the secretary of Development of Industry, Commerce and Services of Sepec, Glenda Lustosa and the special advisor, Anne Marciquevik.

*With the collaboration of Eduardo Hahon, from CNN

Source: CNN Brasil

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