Rice, beans, meats, processed foods. Food sector questions Tax Reform | Economy

Parliamentarians and representatives of the food production chain question and defend changes in the rules proposed by the government to exempt food from the basic food basket in the Tax Reform. Among the assessments are that selectivity in tax collection should not have the desired effects on the final prices of products and that the list of products with a zero rate should be longer than suggested by the Executive Branch to the National Congress.

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The Ministry of Finance suggested zero tax for 15 products, such as rice, beans, flour, milk, sugar and margarine. Another list would have a 60% reduction, including beef, pork and fish, and salt. And a third, with “luxury items”, would have a normal tax rate. The tax paid would partially return to low-income families with per capita income of up to half the minimum wage (the “cashback”).

The Brazilian Beans Association (Abifeijão) assesses that the government’s proposal will not have an impact on legume prices. The entity’s president director, Mauro Bortolanza, states that trade in the product is already under-taxed. And, in some states, there are no taxes charged. “In the case of beans, the measure serves more as government propaganda than as an actual benefit,” he says.

On the trade of beans, there has been no Tax on Industrialized Products (IPI) nor PIS and Cofins since 2004. And the rates in the States are low, because it has always been considered a basic food. “In São Paulo, for example, the rate would be 7%, but, for years, there has been a credit granted that returns the amounts paid to the industry. So, the incidence, in practice, is 1%,” he stated.

The same occurs in other states. In Minas Gerais and Paraná, for example, two of the country’s main bean producers, the tax is zero for domestic sales. “Some states like Pernambuco impose a higher tax on beans that come from outside the Northeast, but a low tax rate on products from the region. Even in this case, it will have little impact,” said Bortolanza.

He believes that the important thing is to keep taxes effectively zero for essential items, such as rice, beans, flour, milk, eggs, chicken and meat. “But meat doesn’t have to be picanha. From a nutritional point of view, any meat will do”, he comments, highlighting that he is still waiting for the reform regulations to have a more detailed assessment on the topic.

The National Sugar Energy Forum, which brings together the sugar industry, is against selectivity in tax collection. The entity criticizes the inclusion of sugary drinks among the segments that should be subject to the so-called “sin tax”. And he says he will work in the National Congress to overturn the proposal.

The selective tax is not for collecting. There is already a reduction in the consumption of sugary drinks in Brazil for other reasons. [O IS] it will only penalize those who still consume, and [o produto] it will become more expensive”, criticizes the president of the National Sugar Energy Forum, Mario Campos Filho.

On the other hand, Campos Filho celebrates the inclusion of sugar in the list of 15 items in the basic food basket that will have the tax rate zeroed. “Sugar had to be included in the basic food basket list, it is an extremely important food”, he argued.

The Brazilian Food Industry Association (Abia) is also against the selective tax. In a note, the entity assesses that it is not the solution to obesity and chronic diseases related to poor diet. Combating these evils, in the industry’s view, involves nutritional information and education.

For Abia, tax reform is Brazil’s opportunity to combat hunger, food insecurity and promote social justice through food. “During all the Tax Reform work, Abia always defended that all foods paid less taxes and that Brazil mirrored OECD countries, where the average tax on foods is 7%”, he states.

Abia also highlights that the food and non-alcoholic beverage industry processes 61% of what is produced in the countryside, brings together more than 38 thousand companies, produces 270 million tons of food and beverages per year, generates 1.97 million direct jobs and represents 10.9% of the country’s Gross Domestic Product (GDP).

Ruralist bench supports another proposal

The Agricultural Parliamentary Front (FPA), which brings together deputies and senators linked to agriculture, criticized the government’s proposal and reported that it will support another project, which it itself presented and which is part of a set of proposals from the so-called Coalition of Productive Parliamentary Fronts. In total, 13 complementary bills were filed in the National Congress.

The ruralist group is against the “cashback” proposed by the government. And he defends the inclusion of more products in the basic basket with zero taxes. You want complete exemption from salt, meat, eggs, oils, fats, natural juices, chestnuts and nuts, prepared and spicy sauces, biscuits, cakes, tea and mate. The project is in the Chamber’s Finance and Taxation Committee and deputy Sérgio Souza (MDB-PR), former president of the FPA, was appointed rapporteur.

“We reinforce our position on the exemption of the Basic Food Basket, without cashback, for families who need access to cheap and quality food, as an urgent and necessary measure to combat food inflation”, argues the FPA, in a note. “We are the ones who vote. Not the government”, says the president of the collegiate, deputy Pedro Lupion.