Lula’s actions against the arms sector have already caused 43 thousand layoffs

A study produced by the Brazilian Association of Importation of Weapons and Warfare Materials (ABIAMB) counted around 43,000 layoffs of employees and collaborators at shooting ranges and stores in the arms sector since President Luiz Inácio Lula da Silva began creating decrees to asphyxiate the sector.

The document prepared by the association also shows that the sector, which had revenues of more than R$19.5 billion in 2022, should close less than 10% of this total in 2023. The estimate is made based on results recorded between January and August 2023. The report is being delivered to parliamentarians in Congress this Wednesday (8).

President Lula and his Minister of Justice, Flávio Dino, have been stating, without presenting concrete evidence, that the current wave of violence in Rio de Janeiro and Bahia is caused by the relaxation of the trade in legal weapons that occurred during the government of former president Jair Bolsonaro.

Since taking office on January 1st, President Luiz Inácio Lula da Silva has been waging a declared war against the legal arms and ammunition market, as well as shooting clubs and ranges spread across the country.

In the first decree published by Lula in the current term (11.366/23), the PT member determined the immediate suspension of new grants of Registration Certificates, a document issued by the Brazilian Army that licenses the so-called CACs – an acronym for hunters, shooters and collectors – citizens common people who can buy weapons, ammunition and supplies for shooting sports.

Furthermore, the same decree stopped the issuance of new authorizations for the purchase of controlled products, including some types of pistols and revolvers, shotguns, carbines and rifles. Even those who already had authorization from the Army to purchase these weapons lost the right to make new purchases.

Layoffs in the arms sector could reach 180 thousand people

Unable to maintain themselves, many stores and shooting clubs were forced to close their doors, causing the dismissal of more than 43 thousand employees from January to August 2023. ABIAMB estimates that, if indirect and informal jobs are considered, the number could reach 180 thousand by the end of the year.

Sales representative Joás Assunção works with the sale of safes to various segments. According to him, sports shooters represented more than 70% of his clients because, to comply with the laws, they need to keep their weapons protected. “It was really a precipitous drop compared to previous years. I don’t know how long we’ll be able to hold on. I received several reports from colleagues who had to close their doors. Stores and shooting clubs that laid off a lot of people. It’s really sad to see a father or mother of a family losing their job like that,” he said.

Self-employed professionals, such as gunsmiths (weapons mechanics), dispatchers and weapons and shooting instructors are among those most affected by the decrees. Maurício Vilela has worked with shooting instruction for over 30 years in the Federal District. With the ban on recreational shooting and courses and training, Vilela was no longer able to work and is facing difficulties in supporting his family.

“More than 90% of my clients disappeared after January 1st. I don’t know what else to do. I’m not an instructor as a hobby, this is my profession. And because of this government I have already taken my children out of private school, moved to a much smaller house, I am living on odd jobs and with the help of friends,” he stated.

In the interior of the country the situation is even worse. Whendre Schimith is a shooting instructor and manages a range in Santa Maria da Vitória, Bahia. He says that he has been forced to fire four employees so far and that, if the situation does not change, he will have to close his doors by the end of the year. “Last year we received up to 50 new customers per week, today we can’t get five in a month. The account doesn’t close,” he said.

Revenue of R$ 4.9 billion in the arms sector with taxes expected to fall by 88%

According to the president of the Brazilian Association for the Import of Arms and War Materials (ABIAMB), Carlos Terra, last year, importers, retailers and service providers together collected approximately R$4.9 billion in taxes. Due to the new decrees, this year the collection should not reach R$580 million. This equates to an 88% reduction.

In addition to the impacts of the first decree in January, in July Lula published new measures against sports shooters that also caused impacts on industry and commerce. Decree 11,615 once again restricted calibers that had been released by the Army since 2017, such as 357, 40 and 9 mm, to citizens.

Terra explains that the decision took the sector by surprise as even Planalto’s interlocutors took the maintenance of the calibers for granted. “As the market was heating up, many retailers took advantage of the second half of last year to fill their stocks. Even with calibers that had more output, like the 9mm. We estimate that there are approximately 295 thousand weapons, now considered restricted, stored in store safes throughout Brazil. Weapons that have already been invoiced by the industry and that now traders are unable to sell”, he added.

Government doubles taxes on weapons and ammunition

In the last week of October, another presidential decree was proposed, this time to increase taxes on weapons. Members of the sector have stated that the decree “threw a shovel” into the hopes of a recovery in the armaments sector. With the excuse of generating revenue of R$1.1 billion in three years, Lula changed the Tax on Industrialized Products (IPI) rate on firearms and ammunition. With the changes, the rates will vary between 25% and 55%. But this will further reduce purchases and drastically reduce tax collection, according to analysts.

According to the text, the tax on cartridges and ammunition inputs increases from 13% to 25%. The tax on firearms, which was 29.5% since July 2022, increases to 55%. The new values ​​should come into force in the first quarter of 2024. According to the government, the measure aims to contribute to the disarmament of the civilian population and the fight against crime.

For Carlos Terra, the adjustment is nothing more than another attack by Lula against the segment and could represent the end of the sector, which today has almost ten thousand commercial establishments across the country. “It is not possible to talk about tax collection with closed stores. With more than 180 thousand jobs no longer existing, it is completely contradictory”, says the president of ABIAMB.

Representatives of the association are in Brasília this week to visit the National Congress and ask for support from parliamentarians from the Public Security Commission and the CACs Parliamentary Front, both in the Chamber of Deputies, to demand measures from the government to try to save the sector.