Brazil Announced to Prolong Tax Reduction Period of Refrigerator and Other Products

According to the report of Japanese media, Brazil government has announced to prolong the tax reduction period of refrigerator, washing machine and a set of other household appliances. In addition, the tax rate of other products will also be lowered. Influenced by its slow economic growth, Brazil enacted this regulation to stimulate its manufacturing industry which has been suppressed for a long time.
 
The Brazil financial officer noted that to prolong the tax reduction period of these products, the employment situation in companies will be protected and improved; another anticipated effect is to promote domestic consumption. Before meeting with entrepreneurs from different fields, the financial officer revealed to the reporters that it is the responsibility of the commercial industry to maintain a decent number of employees and downsizing the number of employees should not be happening in manufacturing industry.
 
It is known that Brazil government had proposed tax reduction policy as early as in 2009 when the economic downturn was clouding the country, indicating that a three-month tax reduction policy would be enacted to favor the manufacturing of household appliances from April 17, 2009. According to the policy, the industrial product tax of refrigerator would be reduced to five percent from the previous fifteen percent and the industrial product tax of stove was reduced from five percent to zero, the industrial product tax of washing machine was reduced from twenty percent to ten percent and that of the clothes dryer was reduced from ten percent to zero.
 
The tax favorable policy initiated this time marks the latest attempt of Brazil to boom its economy. The economic growth rate of Brazil in last year was 2.7 percent, a percentage much lower even than India and Middle South America countries which were impacted by the financial crisis more severely. Brazil had put forward new energy efficiency standards towards refrigerator and other household appliances since 2011. The newly enacted energy efficiency standards had brought along some influence on the refrigerator wholesale industry and its sales results. The new energy efficiency standards had effectively reduced the cost of refrigerator usage. The tax favorable policy will further prompt refrigerator wholesale and sales of other household appliances, thus imposing positive effect on its economic recovery.
 
According to the notes of the financial officer, the tax reduction period which is due at the end of this month has been prolonged to June 30. Furthermore, the domestic manufactured furniture, wallpaper, table lamp and floor together with other products will also been included in the tax favorable policy. The financial officer added that according to the new tax policy, the tax income in the country will see a reduction of 489 million Reais, about 22 billion yen.