24 April 2013 18:19 [Source: ICIS news]
CAMPINAS, Brazil (ICIS)--A tax cut for the chemical industry should improve Brazilian production, the trade group Abiquim said on Wednesday.
The group's comments followed a recent announcement by the country's finance minister, Guido Mantega, that unveiled a stimulus package for the ethanol and chemical industries.
According to Abiquim, purchases of petrochemical feedstock will generate credits for payroll and social security taxes.
"In short, by purchasing inputs for the fabrication of chemical products [Brazilian] companies will [pay] 1% in payroll and social security taxes and will have a tributary credit of 9.25%", said Abiquim.
The stimulus package for the chemical industry takes effect this year, Abiquim said.
"In 2016, the tributary credit will decrease 2% a year, reaching 6.25% in 2016, and 4.25% in 2017. In 2018, it will get back to its current levy, which is 3.65%", it said.
The measure will allow the Brazilian chemical industry to increase its utilisation rates, said Abiquim.
On Tuesday, Mantega said the measure should help the nation's chemical industry to better compete against companies in the US that have seen their costs decline.
Investments by the Brazilian government for the chemical industry is expected to reach Brazilian reais (R)1.1bn ($550m, €424m) in 2013, he said.
($1 = €0.77, $1 = R2.03)
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