Bolsonaro fails to keep his promise and extends tax reduction that harms the Manaus Free Trade Zone

Bruno Pacheco – from Cenarium Magazine

MANAUS – President Jair Messias Bolsonaro (PL) has broken the promise made last month to reissue the decree that promoted a 25% linear cut in the Tax on Industrialized Products (IPI). The decree 11.021, which harms the Manaus Free Trade Zone (MFTZ), was published on the evening of Thursday 31, in the Official Journal of the Union (DOU), extending for another 30 days the effects of the previous decision.

Last month, at a meeting with the governor of Amazonas, Wilson Lima (União Brasil), political leaders and businessmen of the state, the federal government had guaranteed that the measure would be reissued to preserve the competitiveness of the industries installed in the ZFM. Bolsonaro was even invited to visit Manaus between days 18 and 23 to make the signing of the new decree, but the president did not make the trip to the capital of Amazonas.

The 25% IPI reduction established in February, in practice, breaks the constitutional legal certainty of the MFTz and takes away the competitiveness of industries in the Industrial Pole of Manaus (PIM) in relation to products manufactured in other regions of Brazil. According to the federal lawmaker and vice president of the House, Marcelo Ramos (PSD), more than 500 thousand direct and indirect jobs generated in the region remain under threat for another 30 days without the revocation of the decree.

“By not publishing a new decree reducing the IPI excluding products from the MFTz, as had agreed with political and business leaders, and extend the previous decree, the federal government prolongs our agony and treats irresponsibly something that depends on the lives of people of the largest state in the federation”, said Marcelo Ramos.

For the politician, the economy and the Amazon people cannot be subjected to the “whims” of anyone. “After all, there are half a million families who depend directly on the MFZ model to bring food to their tables,” stressed the federal deputy.

‘Noventena’

According to the former superintendent of the Superintendence of the Manaus Free Trade Zone (Suframa), Thomaz Nogueira, the tax reduction that directly affects the Manaus Industrial Pole is consolidated and any new corrections or realignment on the rate are subject to the “noventena”, i.e., it needs to wait 90 days from the decree.

“To correct, means, to realign the rates upwards. Tax increases have to wait 90 days, after publication, to be effective. Bolsonaro’s strategy is one of fait accompli. The waiting period must give way to business decisions. The damage to IT is immediate,” explained Nogueira on Twitter.

Check out the decree in its entirety: