September 18, 2012

Brazil has announced a recent tax relief that will benefit the local pig and poultry industries.

In total, over 25 sectors of the economy will be affected, which would imply a renunciation of US$12.8 billion in 2013.

In four years (2013-2016), the exemption will cost US$60 billion.

The decision is to replace 20% employer contribution to Social Security by a rate of 1% of revenue. Moreover, exporting firms that export poultry and pigs will not pay anything on its production revenues.

The Minister of Agriculture, Livestock and Supply, Mendes Ribeiro Filho, highlighted the commitment of the entire government in the resumption of growth in the economy and in supporting strategic sectors such as agribusiness.

"The measures announced will contribute to the reduction of production costs and internal inputs."

He adds that the actions relieving the payroll of wages and changing the base for sales are positive for maintaining and expanding employability, besides stimulating the competitiveness of Brazilian products.

In Brazil, the pork industry has 190,000 employees and uses mostly hand labour while in competitor countries, most of the industry is already automated.