Read this Wednesday’s edition of the FolhaMercado newsletter (19) – 04/19/2023 – Market

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Government backs off and maintains exemption

After the negative repercussions on social networks, the government will no longer end the import tax exemption for orders of up to US$ 50 between individuals. The announcement was made this Tuesday by the Minister of Finance, Fernando Haddad.

• As determined by Sheetthe retreat had as a backdrop the refusal of President Luiz Inácio Lula da Silva (PT) to penalize the poorest layer, in addition to a dose of pressure from the first lady, Janja.

Remember: the government had decided to end the exemption for international orders of up to US$ 50 sent by individuals and destined for individuals, arguing that foreign websites used this loophole to avoid paying the import tax.

• The measure generated negative repercussions due to the possibility of an increase in the prices of products sold mainly by Asian retailers, such as Shein, AliExpress and Shopee – the platforms deny circumventing the legislation.

Next steps: with the maintenance of the exemption, the Revenue will provide for the obligation of complete and advance import declarations, identifying the exporter and importer.

• The minister acknowledges that the expected revenue from the measure may be reduced now that the decision has been changed.

More on the subject

On the Stock Exchange, Brazilian retailers, rivals of foreign sites, saw their shares end the trading session in decline after the government’s retreat. It was the case of Renner (-4.12%), C&A (-3.12%) and Magalu (-3.28%).

I was taxed, now what? Here we show you the path in the Revenue of purchases on platforms abroad and what to do if there is an import tax charge.

Opinion: Revolt against taxes is a problem for Lula’s new spending cap, writes columnist Vinicius Torres Freire.

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Government presents framework with news

This Tuesday, the government presented the entire fiscal framework, which, when approved, will replace the spending cap as the country’s new fiscal rule. The objective is to balance the public accounts and avoid an accelerated growth of the debt.

the news announced were some exceptions, both in the spending limit to be created next year and in the calculation of income:

• In terms of expenditure, transfers to municipalities for the payment of the nursing floor, resources destined to agreements with precatories and contributions to state companies are excluded from the ban. In total, there are 13 exceptions (see here).

• For revenue, revenue from concessions, dividends paid by state-owned companies and gains from the exploitation of natural resources (mainly oil royalties) are not included – in addition to constitutional transfers made to states and municipalities.

another news was that inflation for the entire year of 2023 will be considered to readjust the expenditure limit for 2024, not the accumulated 12 months up to the middle of the year.

The presentation was well received by economists, who questioned, however, the space for new investments and the exceptions to the expenditure limit.

Remember: the main structure of the framework had already been presented last month.

• It foresees that the growth of federal expenses will be limited to 70% of the advance of the revenues registered in the 12 months until June of the previous year (that is, if the revenue grows 2% in real terms, the expense grows up to 1.4% also in real terms).

• There is also a ceiling (of 2.5%) and a floor (of 0.6%) for the real growth of expenditures in years in which income rises a lot or falls a lot, respectively.

• The plan outlined foresees zeroing out the deficit (collection less than expenses) by 2024 and generating a surplus (collection greater than expenses) of 1% of GDP by 2026. By not achieving the targets, however, there is no need to block resources.

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ArcelorMittal enters into joint venture with Casa dos Ventos

Steelmaker ArcelorMittal and renewable energy generator Casa dos Ventos will create a joint venture to operate a wind farm in Bahia, with a capacity of 554 MW (megawatts) and total investments of $800 million (BRL 3.9 billion).

• The announcement was made this Tuesday by the steel manufacturer, who will invest US$ 150 million (R$ 741.2 million) to own 55% of the newly created company – the other 45% will remain with Casa dos Ventos.

In numbers: with operations starting in 2025, the project will be responsible for providing 38% of the energy used in 2030 by ArcelorMittal in Brazil, one of the largest consumers in the country.

• The steelmaker will sign a power purchase agreement with a 20-year term, with an option to extend for a further 15 years.

• The energy contracted in the project would be sufficient to meet 1.1 million of homes, according to the statement.

the transaction between the companies has already been approved by Cade, making it the largest corporate renewable energy contract in the country.

• There is also the possibility of expanding the project’s capacity by adding another 100 MW of solar energy.

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Netflix postpones plan to block shared passwords

Netflix decided to postpone the launch of its new password sharing restriction policy until the next quarter after observing a “cancellation reaction” in countries where the measure was implemented.

Understand: the strategy of banning shared accounts is intended to bring more revenue to the streaming pioneer, which cited last year that 100 million accounts were shared by people who do not live in the same household.

• In February, it detailed on its website the model for verifying these accounts, which includes the user connecting to the main Wi-Fi network once a month and an option for those who are traveling.

The measure has already been implemented in countries such as Canada, New Zealand, Spain and Portugal, and Netflix says it is “satisfied with the result”.

• She says, however, that she observes a “canceling reaction” of subscriptions in markets where the restriction is launched, which impacts the growth of subscribers in the short term.

In numbers: the delay in launching made the company predict a revenue of $8.24 billion for the period between April and June, below the projection of $8.48 billion of analysts.

• Netflix said it added 1.75 million new subscribers in the last quarter. Its shares fell as much as 10% in the aftermarket, but soon recovered.

end of an era: the company also announced that it will close DVD.com, the DVD rental service that started the company and revolutionized the business model of traditional rental companies 25 years ago