Plan for new machines can impact up to BRL 15 billion – 07/24/2023 – Market

Finance Minister Fernando Haddad said this Monday (24) that the Lula government (PT) envisions a plan to encourage industry to buy machinery and equipment from 2024 and that the accelerated depreciation measure could have an impact on public accounts of R$3 billion to R$15 billion.

The statement was given after Haddad’s meeting with the vice-president and minister of the Mdic (Ministry of Development, Industry, Commerce and Services), Geraldo Alckmin (PSB).

“We reaffirm our commitment to the thesis of accelerated depreciation for 2024. And we are going to define its scope. We are going to see the evolution of the Budget process from August 31 and we are going to define the starting point of accelerated depreciation”, he told journalists as he left the Planalto Palace.

The head of the Treasury stated that the calibration will depend on the space opened in the Budget in 2024, with the approval of laws and pieces sent by the Executive to the Legislative in August.

“She [depreciação acelerada] it can go from R$ 3 billion to R$ 15 billion. Calibration is the starting point”, added Haddad.

With an accelerated depreciation plan, the company that invests in the purchase of new equipment can deduct the investment value more quickly in the calculation of the IR (Income Tax) after the acquisition of the asset – today this depreciation is discounted over the years.

By deducting the depreciation of assets in advance, there is a change in the companies’ cash flow. Through the measure, the government intends to encourage the renewal of machinery to foster industrial productivity.

Last year, the government of then President Jair Bolsonaro (PL) studied a series of measures to strengthen the national industry, among them a decree that determined that a company could make all the deduction of the depreciation of new machines and equipment in the IR already in the first year after the acquisition of the good.

Today, the term varies from five to 20 years depending on the segment. In the case of IT and technology goods, for example, the minimum time is worth it.

The measure reduces revenue in the short term and goes against the government’s plan to raise revenues in order to meet the target of zeroing the public deficit next year. In January, Haddad released a broad package with the promise of delivering a fiscal improvement of R$ 242.7 billion in public accounts this year.