Government formalizes cutting food tariffs to curb inflation

BRASILIA (Reuters)-The federal government formalized on Thursday the reduction of import tariffs announced last week to a food list, to the objective of facing the high price, although questions undergo practical effects.

Vice President and Minister of Development, Industry and Commerce (MDIC), Geraldo Alckmin, had to take the government to zero meat, sugar, corn, coffee, sunflower oil, pasta, sardines, olive oil and cookies, but had not yet disclosed the specifications.

In a unanimous decision on Thursday, the Foreign Trade Chamber (Camex) approved the Import Tax cut from 10.8% to 0% for boneless meats, but only cattle.

In the case of coffee, it was defined that the 9% rate will be reset to the non -decaffeinated roasted coffee and for non -dismissed coffee in grain. It will also be cut to zero the rate for sugarcane sugar, which was 14.4%.

The purpose of the measure is to help control inflation, although analysts say that the decision on coffee and sugar should not have a practical effect, as Brazil is the largest producer and exporter of both products.

Regarding olive oil, the cut from 9% to 0% will only be valid for the product classified as extra virgin.

Also zeroed were corn import rates, except for sowing (7.2%before), pasta (14.4%), cookies and cookies (16.2%) and sunflower oil (9%).

It was also made the decision to zero the sardine preparation fare, today at 32%, but respecting a limit quota of 7,500 tons.

The committee also decided to increase the palm oil import quota with exemption from 60 thousand tons to 150 thousand tons.

“These are emergency measures to reduce tax, to reduce food cost and to help, at this exceptional time, to reduce inflation, especially food inflation,” Alckmin said in an interview with journalists.

He stated that the measure comes into force on Friday and there is no determined deadline for the tariff exemption, noting that the initiative will continue to be in force for the time required to reduce food prices.

According to Alckmin, the cost of exemptions is estimated at 650 million reais if they remain in force for a year, a deadline that he said he expected to be shorter.

In the interview, he also stated that states are studying to reduce the incidence of ICMS on food, citing Piauí as an entity that has already made that decision.