Producers of electronics and hot drinks, such as wine and cachaça, demanded changes in the provisional measure that raises the tax on these products (MP 690/15). In a public hearing on Wednesday (14), manufacturers of the affected products estimated that government revenue from the measure will be low and that the negative impact will be “disastrous” on production, job creation and the consumer's pocket.

The MP was issued at the end of August, but some rules only begin to apply in 2016, with the expectation of increasing government revenue by R $ 8,3 billion.

The measure changes the calculation of the Tax on Industrialized Products (IPI) that focuses on wine, cachaça, whiskey, vodka, rum and other hot drinks. Instead of a fixed amount of IPI for a given quantity produced (ad rem rate), as is the case today, the tax will be calculated with varying rates (10% to 30% according to the drink) on the value of the product (ad valorem rate ).

Abusive load
For the vice president of the Brazilian Association of Importers and Exporters of Beverages and Food, Orlando Rodrigues, the measure will have an opposite effect to the government's intention to increase tax collection.

“It may generate an abusive and disproportionate tax burden, which can present increases of up to 500% in the value of the tax, with the generation of chain taxes. Increasing these taxes, at a time when consumption fell in restaurants and stores, would be just another way to increase unemployment that is already starting to happen in the sector, ”said Rodrigues.

According to the calculations of the Organization of Brazilian Cooperatives (OCB), the change in the calculation of the IPI will increase the price of each bottle of wine, for example, by R $ 2 to R $ 5.

OCB President Marcos Caetano added that, in the case of wine, the cooperatives will not be able to pass on the tax increase to the final price of the product. “The impact is very negative. There are cooperatives that bring together more than a thousand smallholder families. ”

The executive director of the Brazilian Institute of Cachaça (Ibrac), Carlos Lima, cited “irreversible damage” to stills in the country, starting from MP 690: effective increase of 158% to 300% in the final value of the IPI, more informality, less sanitary control and risk of closure. According to Ibrac, the country has 11.124 cachaça producers.

Fall in sales
The complaint of the electronics and information technology sectors was also widespread, since MP 690 ends the exemption of PIS / Pasep and Cofins granted, in retail sales, to computers, smartphones, routers and tablets.

In principle, this exemption, provided for in the so-called Lei do Bem (Law 11.196 / 05), should apply until the end of 2018, but the government claims that the benefit has already fulfilled its function.

The president of the Brazilian Association of the Electrical and Electronic Industry (Abinee), Humberto Barbato, classified the expectation of government revenue with the MP 690 as “illusory”, especially given the forecast of a drop in the marketing of products that will lose the benefits of the Well. "It's a shot in the foot," he said.

In the same vein, the president of the Etco Institute, Evandro Guimarães, stressed that the provisional measure may increase the informality of the Brazilian economy. “The country's fiscal situation is really serious, but attention is needed to products that are already the target of smuggling, piracy, counterfeiting and embezzlement. This scenario of encouraging crime worsens with each tax increase, ”he warned.

The president of the Federation of Associations of Brazilian Information Technology Companies (Assespro), Jeovani Salomão, also complained that the changes envisaged in the MP cancel any profits from small and medium-sized companies that dominate the sector.

The president of the Brazilian Association of Information and Communication Technology Companies (Brasscom), Sérgio Gallindo, adopted an even more dramatic tone. “The cost of MP can be the ruin and the message of horror for a sector that was Brazilian China,” said Galindo, referring to the increased participation of the information technology sector in the Gross Domestic Product (GDP) and the generation of 88 thousand jobs until 2014, according to the entity.

Digital exclusion
The president of the National Union of Telephony and Cellular Mobile Service Companies (SindiTelebrasil), Eduardo Moreira, stated that the measure undermines national broadband and digital inclusion programs, in addition to encouraging smuggling and punishing a sector that has contributed to the country's GDP.

“What the Brazilian population most wants today is a cell phone with access to the internet. We are pushing the population to stop buying it or to go and get it from the smuggler, ”said Moreira.

He recalled that the country has a strong demand for connectivity and that, today, 63% of internet accesses are made through cell phones with broadband. "This represents a need for more investments and not barriers for a sector that employs 500 thousand people", he said.

To illustrate the high tax burden in the sector, Moreira informed that companies paid R $ 33 billion in ICMS alone in 2014.

Agricultural Front
The president of the mixed commission that analyzes the MP, deputy Celso Maldaner (PMDB-SC), informed that, sensitized mainly with the situation of the small wine producers of the Country, the Agricultural Parliamentary Front is already mobilized to overturn this provisional measure, in case the text is not changed.

“It is a hard stop. The front is working very hard today not to approve this provisional measure. So, it is interesting for us to find a negotiation path in order to arrive at a good solution ”, said Maldaner.

Tax adjustment
The commission's rapporteur, Senator Humberto Costa (PT-PE), promised to take the complaints mainly to the IRS. Costa admitted that there are doubts about the effectiveness of the measure in generating the revenue intended by the government and, therefore, it would be possible to seek alternatives with less impact on the productive sector.

“We all advocate fiscal adjustment, but, logically, it should not be our goal to allow any sector to be tougher than others. We will try to build something close to a consensus. For all I have heard so far, we have some leeway to try to work, ”said the rapporteur.

Deputies Luis Carlos Heinze (PP-RS), Bilac Pinto (PR-MG) and Edinho Bez (PMDB-SC) reinforced the request to resume negotiations with the government in order to change the MP. “I find it difficult for Congress to approve an increase in the tax burden at this time of economic crisis. Either go ahead in the negotiation or the MP will be immediately rejected at the plenary session of the Chamber ”, warned Bilac Pinto.

MP 690 is still under analysis in the mixed commission. Subsequently, the measure needs to be approved by the House and Senate Plenaries by the 29th to avoid losing its validity.