President Jair Bolsonaro sanctioned a law that provides for the restoration of the Special Regime for the Chemical Industry (Reiq) from 2023, a tax benefit revoked by a Provisional Measure at the end of last year, but conditioned the incentive to comply with obligations by the industry.
Bolsonaro’s decision was criticized by the association that represents the sector, which sees a breach of agreement by the government and points out that the regime, an incentive for the importation of petrochemical raw materials, may not return in practice.
The sanction is in the Official Gazette of the Union this Wednesday.
There is no special regime for generating factors that occurred between April and December of this year, according to the law. The conditions for executing the benefit after this period include compliance with occupational safety and medicine standards, implementation of environmental measures to compensate for the pollution generated and fiscal and social security regularity, said the General Secretariat of the Presidency of the Republic, in a note.
These conditions will be regulated by the government. André Passos Cordeiro, director of institutional relations at the Brazilian Chemical Industry Association (Abiquim), stated that the sector has no way of evaluating the operability of these requirements before a regulation on the subject.
The entity, according to him, tried to convince the government to maintain the regime in 2023 regardless of regulation, but this was not complied with, so the regime will only return after regulation, if it occurs.
Bolsonaro vetoed a transition period for the benefit until 2027, which had been included by Congress – the prediction before the Provisional Measure was that the special regime would end in 2024.
The General Secretariat of the Presidency said that “the vetoed provisions are restricted to those who do not comply with the rules of fiscal and budgetary responsibility”.
Bolsonaro pointed out in the order that the Ministry of Economy recommended the veto because “it would extend the validity of the benefit, previously scheduled until 2024”. The text also cites “renunciation of revenue without presentation of the estimate of the budgetary and financial impact and of adequate and sufficient compensatory measures”.
Passos said that the registration of agreements in the Senate and in the Chamber of Deputies, including those of parliamentarians linked to the government, “had reassured us about possible vetoes.”
Reiq was revoked by the government on the last day of 2021.
Abiquim complains of legal uncertainty and warns of deindustrialization in the country, in addition to very short-term effects in the sector with the withdrawal of Reiq since April.
Passos said that representatives of the association are due to meet with government officials on Thursday and that the industry has begun, in parallel, negotiations in Congress to overturn the vetoes.