Lula cites job bankruptcy without Manaus Free Trade Zone and Bolsonaro Government calls model a ‘tax haven’

May 24, 2022

14:05

Marcela Leiros – Cenarium Magazine

MANAUS – The Manaus Free Trade Zone (MFTZ) became the agenda in the race for this year’s elections. On Tuesday, 24, the former president of the Republic and pre-candidate for office Luiz Inácio Lula da Silva (PT) spoke about the importance of the economic model for the generation of employment and income in the country and in Amazonas, while the Bolsonaro government, in an appeal filed by the General Advocacy of the Union (AGU) against the decision of the Minister of the Supreme Court (STF), Alexandre de Moraes, referred to the ZFM as “tax haven”.

“The Manaus Free Trade Zone is important for the economy of the state and of Brazil. People need wages, jobs. I ask myself: if there is no Free Trade Zone, where will these people work?”, questioned the former president on the social network Twitter.

Former President Luiz Inácio Lula da Silva’s tweet (Reproduction/ Twitter)

In the appeal, the substitute attorney general of the Union, Adler Alves, argues that the MFTz is not immune to the economic scenario in Brazil and that “it makes no sense to sustain a local regime of industrial development at the expense of the inanition of the national industry as a whole.

“After all, the Manaus Free Trade Zone is not a sovereign tax haven, immune to the economic and fiscal context of the rest of Brazil, but a legal regime of tax exemption integrated into a Federation, which, under the 1988 Constitution, has several projects of justice and development,” says in an excerpt of the court decision. (See full text at the end of the story)

Excerpt from the appeal by the Attorney General’s Office (Reproduction)

The decision of Minister Alexandre de Moraes overturned the rate of the Tax on Industrialized Products (IPI). Upon granting the request, Moraes partially suspended the decrees that reduced by 25% and 35% the IPI in the rest of the country and fully suspended the decree that zeroed the rate of the soft drink pole.

New reduction reaches the Free Trade Zone

On Monday, 23rd, the federal government decided to reduce by another 10% the Import Tax rates over 6,195 tariff codes of the Mercosul Common Nomenclature (NCM). The measure covers goods such as beans, meat, pasta, cookies, rice, construction materials, among others from the block’s Common External Tariff (TEC).

Read also: Bolsonaro fails to keep his promise and extends tax reduction that harms Manaus Free Trade Zone

To CENARIUM, the president of the Federation of Industries of the State of Amazonas (Fieam), Antonio Silva, pointed out that the reduction cheapens the cost of imported products against the produced in the national territory and this affects the MFTZ.

“Any broad reduction as the one enacted by the federal government implies in impacts to the competitiveness of the Manaus Industrial Complex. We are still analyzing it to verify the degree of the possible impact,” he said.

Check out the appeal in full:

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