The agricultural sector must be removed from PEC 42, which proposes the end of the Kandir Law, under penalty of huge economic setback for the country. Since 1996, this legislation exempts exports of Brazilian agricultural products from ICMS.
The assessment is from the Brazilian Rural Society (SRB), in response to the determination of the Minister of Economy, Paulo Guedes, and some senators to end the measure through the Proposed Amendment to the Constitution. Created in 1996, the Kandir Law exempts primary products and semi-finished goods intended for export from tax on the circulation of goods and services (ICMS). If the PEC sacrifices agribusiness, the tax will be applied to foreign sales of corn, soybeans, coffee and animal protein, making these and other products less competitive on the international market.
PEC 42, whose rapporteur is Senator Veneziano Vital do Rêgo (PSB-PB), is on the Senate's agenda to be voted on this week. For the SRB, the states' financial problems will only be aggravated if the senators decide to end the Kandir Law: “Rural producers will be penalized for the administrative inefficiency of some federated entities”, says the entity's president, Marcelo Vieira”. In the entity's assessment, the surcharge will affect all chains, including purchasing companies, agribusinesses, exporters and the population that consumes these products. “The increase in taxation goes against what the Federal Government has been proposing for the sector”, assesses Vieira.
According to a survey by the Organization of Brazilian Cooperatives (OCB), the end of the Kandir Law would cause a negative impact of R$ 47.8 billion in revenue for Brazilian agribusiness. This means a loss of 8.1% in the so-called Gross Production Value (VBP) in relation to the numbers achieved by the sector in 2018. The OCB study also shows the evolution of some crops comparing today with the years that preceded the Law. Soybean exports, for example, grew by 654%, while corn exports rose by 3.7678%.
For the SRB, the debate on the end of the Kandir Law involves, first and foremost, a well-structured tax reform. According to the entity, the current tax system is inefficient, outdated and out of step with the development of agribusiness. In this situation, ending exemption policies only sacrifices the sector, responsible for 48% of our exports.
The SRB announces that it will reinforce its articulations in Congress in defense of the Kandir Law, dialoguing and demanding the support of senators so that agribusiness is spared in the PEC. At a time of economic recovery, fiscal responsibility and balanced public accounts, it is unthinkable to transfer the burden of a financial crisis to the sector that contributes so much to the country's economy.
For Ocesp, the end of the Kandir Law is a shot in the foot
For the president of the Organization of Cooperatives of the State of São Paulo (Ocesp), Edivaldo Del Grande, the end of the Kandir Law would have negative impacts on the country. “We are world champions in food production and supply thanks, in large part, to the Kandir Law. It has given us more competitiveness when it comes to exporting to countries that provide huge subsidies to keep their farmers in the field and still impose unfair barriers on our products,” says Del Grande.
For the leader, ending the Kandir Law means exporting taxes, reducing competitiveness and hindering access to markets abroad. “We already have a very serious logistics problem, which makes export costs very expensive. The end of the Kandir Law would be another important obstacle. We are going to lose markets abroad that it took us decades to conquer”, warns Del Grande.
The representative of the cooperatives criticizes a tendency to increase taxes on the sector that has been the engine of the economy. “For a long time, agribusiness has been holding a surplus in our trade balance. When we export, we bring in currency that boosts the internal economy, increasing the number of jobs and considerably improving revenue for governments”, highlights Del Grande, adding that, with the Kandir Law, revenue does not exist at the exit but is overcome with the inflow of currency that moves the economy.
Source: DATA
