Good morning! Today, we talk about Congress’ push to help exporters. Brazil’s continuing monetary tightening process. And what hurt Brazil’s stock market in April.
Lawmakers want to extend drawbacks
The House is set to vote today on a presidential provisional decree establishing a one-year extension to special drawback regimes (consisting of rebates on taxes or tariffs) for exporters that buy their inputs abroad. The government claims the economic effects of the Covid pandemic still weigh hard on supply chains — and that exporters need the additional push.
How it works. The tax rebate applies to products that will be used exclusively to produce goods for foreign markets. Originally, companies were forced to pay tax if they do not sell these goods within two years (extendable for an extra 12 months). In such cases, they are also unable to get drawbacks for two years.
- Now, exporters are given a longer grace period.
Why it matters. The association of Brazilian exporters estimates that over 1,000 companies have been affected by supply chain disruptions and entrance barriers in several markets during the pandemic.
Litigation. Even before the government’s decree, companies had already filed lawsuits asking for more time to sell their products abroad —...