Brazil has been experiencing severe economic problems that, a priori, arose after the COVID-19 pandemic. However, the conflict in Eastern Europe between Russia and Ukraine aggravated this situation, causing inflation to become increasingly high. In this regard, the Ministry of Economy recently announced that import tariffs on ethanol and six types of food will be zeroed by the end of the year, in an effort to contain high inflation.
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According to the Secretary of Foreign Trade, Lucas Ferraz, estimates indicate that reducing the ethanol tariff could cause the price at the pump to decrease by around 20 cents. In the case of zero tariffs for food and ethanol, the measure will be effective immediately.
As for the reduction of capital goods and technology, a measure considered more structural by the government, the effectiveness will start on April 1st. Thus, the foods that will have zero taxes are: ground coffee (current rate of 9%), margarine (10.8%), cheese (28%), pasta (14.4%), sugar (16%) and soybean oil (9%).
For government technicians, according to the National Consumer Price Index (INPC), these items are the ones that weigh most in the Brazilian pocket today. Today, the ethanol rate is in the double-digit range, at 18%. For Ferraz, this action “is a measure aimed at preserving the consumer basket of the poorest population, but it is no silver bullet, the most effective instrument is policy monetary”.
He explains that the 20 cents reduction is not expressively significant for the final budget, but rather to start encouraging drivers to use ethanol. According to the government folder, these items have been included in the list of exceptions that can be used by Brazil in Mercosur to change tariffs unilaterally, without discussing with the other members.
According to the estimates presented by the ministry, R$ 282.5 billion are added to the GDP (Domestic Product Gross) over 18 years with this total reduction, as well as an increase of R$ 591.6 billion in trade outside.
Geographer and pseudo writer (or otherwise), I'm 23 years old, from Rio Grande do Sul, lover of the seventh art and everything that involves communication.
