Manaus Duty-Free Zone to be spared from manufactured goods tax cut

After meeting with President Jair Bolsonaro and Economy Minister Paulo Guedes, Amazonas Governor Wilson Lima said products also manufactured in the Manaus Duty-Free Zone will not be included in a new decree to cut the IPI manufactured goods tax. 

Mr. Lima said he was given “guarantees” that the measure would be reissued — this time including an exclusion for goods the Duty-Free Zone produces. Amazonas authorities had complained that the recently approved 25-percent cut to IPI could negatively impact the trade zone, as companies already under special production conditions would be left at a disadvantage. 

As these companies already don’t pay taxes on manufactured goods, they receive tax credits when they sell to other regions — so, in their case, a tax cut is actually a bad thing.

With that guarantee, said the governor, the state can ensure that those companies will “remain there, creating jobs.” In addition to the Manaus Duty-Free Zone, the Amazonas state industries federation Fieam published a statement criticizing the federal government’s decision regarding IPI tax. Beyond that, and to avoid further quarrels in an election year, Jair Bolsonaro is expected to sign the revised document in March.

• #industry