Brazil to Terminate Tax Reduction and Exemption Policy on Industrial Products (I

Brazilian Finance Minister Mantega declared that recently Brazil government is to terminate preferential policy on industrial products involving white home appliances such as washing machine, refrigerator, cooking range etc. and auto industry. It was said that the preferential policy on home appliances would be terminated on the weekend. Moreover, the expiry date of tax preference on auto industry had already been confirmed.

The tax reduction and exemption policy on industrial products (IPI) was an economic stimulate plan promulgated by Brazil government, for the purpose of coping with financial crisis. Mantega shown that, at present, the nation's economy has begun to step into a new period for rapid growth, thus it doesn't need the tax preference policy support from government any more. Though Brazil industry shrank by 5-6% in 2009, Mantega still had great confidence for the industrial growth in this year. He estimated that, driven by elements of domestic demand and increasing investment, the growth of GDP in Brazil would achieve 5-5.5%, and bring 1 million employment opportunities.