Solidarity triggered the STF (Supreme Federal Court) today to ask for the suspension of measures by the government of President Jair Bolsonaro (PL) that reduced the IPI (Tax on Industrialized Products). In the action, the party alleges that the decrees reached “the center of concentrates” in the Manaus Free Trade Zone (ZFM).
“It is fundamental to emphasize that the reduction of the tax burden contained in the decrees is not contested here. The reduction of the tax burden, whenever possible, is beneficial to the social fabric. The question is the absence of compensatory measures to production in the Manaus Free Zone , under the terms of the constitutional commandment”, says an excerpt.
Solidarity’s intention is for the STF to immediately suspend parts of the decrees and declare them unconstitutional. The government fulfilled its promise to increase the IPI cut from 25% to 35%, a measure that reduces the competitive advantage of the ZFM, where companies have incentives to settle.
In the ADI (Direct Action of Unconstitutionality), Solidarity alleges that the way of reducing the IPI “ignores, disobeys and affronts the Federal Constitution” in relation to the protection of the Manaus Free Zone. For the legend, there are other legal ways to carry out the tax reduction “without prejudice to the constitutional protection due” to the region.
According to the party, the reduction in goods produced in the area “deadly impacts its competitiveness”. In addition, the action emphasizes that the damage would compromise the “survival of the Manaus Free Trade Zone model”.
“Without the feasibility of producing in the ZFM, the economic survival of an entire State, an entire population and an entire geopolitics that had been built since 1967 is put at risk”, says the text.
As companies located in the region are exempt from IPI and generate credits on this tax, a reduction in rates makes the activity in the Free Zone less attractive to the market and, therefore, leads to lower job creation in the area.
AM governor says he will trigger the STF again
On April 29, the governor of Amazonas, Wilson Lima (Union), stated that he intends to trigger the STF (Federal Supreme Court) again to try to overturn the elimination of the IPI on soft drink inputs. The state government had already filed a lawsuit in the Court, last week, against the reduction of the tax on other products.
An ally of President Jair Bolsonaro (PL), the governor said that the measures would remove tax benefits for companies in the Manaus Free Trade Zone. Lima said he strongly believed in “the president’s good intention of having the courage to face the market and reduce the tax”, something “that the business community expects so much from the government”. However, the president would be “very poorly advised by the economic team”.
“Paulo Guedes entered 2019 already declaring himself against the Manaus Free Trade Zone. This guy’s objective is to end the Manaus Free Trade Zone. This is very clear, no one has any doubts,” he said.
Today, the mayor of Manaus, David Almeida (Avante), shot Bolsonaro and called Paulo Guedes an “imbecile”. According to him, the president and the Minister of Economy “do not defend the jobs” of the ZFM workers. In a speech, Almeida declared that he is evangelical and was Bolsonaro’s voter in 2018, but asked the population to charge him for jobs and to choose to follow Guedes in government.
And do you know what the culprit is for the idiot Paulo Guedes? The Free Zone, which means less than 0.9% of Brazilian GDP. An imbecile like that who never received a vote comes to harm the people of my city. My position regarding Bolsonaro is this, I voted for him, but I charge him, he has to respect the people he elected
Continued David Almeida, mayor of Manaus