Government incentive for ports could cost up to R$5 billion – 01/23/2024 – Market

The Minister of Ports and Airports, Silvio Costa Filho, stated this Tuesday (23) that the extension of the special regime for the modernization and expansion of ports could cost the government between R$4 billion and R$5 billion by 2028.

This year, the cost will be around R$2 billion. The minister added that the expectation is that this amount will be reduced year by year, with an end to what he described as holding back investments.

The speeches took place during an event at the Ministry of Finance to present the Report, a tax regime to encourage the modernization and expansion of the country’s port structure. The ceremony was also attended by ministers Fernando Haddad (Finance) and Renan Filho (Transport).

In December last year, the National Congress concluded the processing of the bill that extended the validity of the Report until 2028.

This regime allows benefiting entities to purchase equipment with exemption from IPI, Pis, Cofins and Import Tax.

“Regarding the fiscal impact, we expect this to be in the order of R$2 billion [neste ano]. We are discussing this process, but it is more or less like this [ordem]: R$2 billion per year, but these numbers are still being finalized. We are taking the entire history of these last five years”, stated Costa Filho, adding that this value still depends on the volume of private sector investment during this period.

Subsequently, however, the minister highlighted that the expected amount is only for 2024, being reduced in subsequent years. The expectation is that this final value will be between R$4 billion and R$5 billion, until the regime’s closing date.

“It is only important to note that, in the first year, it will be a higher value, because there is a lot of pent-up demand for the volume of investments, of purchases that will be made and, naturally, from the second year onwards there tends to be a reduction. The idea is that it could arrive in 2024 [com esse valor] and then it decreases year by year, and will be from R$4 billion to R$5 billion in five years. It’s the value we’re waiting for,” he added.

Also present at the event, Minister Fernando Haddad defended exemptions when it comes to investments and also sectors linked to exports.

“This is a program that exempts investments, and this is the backbone of our tax reform. In fact, two of the pillars of the tax reform are represented this year: exemption on investment and exports”, stated the minister.

“There is no country that develops without encouraging investment and exports”, he added.

Haddad’s speech is in line with President Luiz Inácio Lula da Silva’s (PT) defense of actions to benefit exporters, made during the presentation of the new industrial policy.

“For Brazil to become competitive, Brazil has to finance some things it wants to export. We cannot act as we have always done, thinking that everyone is obliged to like Brazil, that everyone will buy from Brazil without us fulfill our obligations. Debate at the international market level is very competitive, it’s a war”, said Lula.