Rousseff’s Stimulus Measures to Spur Brazil Economy: Timeline
March 3, 2011: Alessandro Teixeira, deputy trade minister, announces the Treasury will lend an additional 55 billion reais ($27 billion) to state development bank BNDES.
Aug. 2, 2011: Rousseff exempts four industrial sectors -- clothing, footwear, software and furniture -- from Brazil’s 20 percent payroll tax as part of her “Bigger Brazil Program.” Rousseff also announces tax credits for exporters of industrial goods equal to 0.5 percent of their sales abroad.
Sept. 15, 2011: Finance Minister Guido Mantega announces a 30 percent increase in the excise tax known as IPI for carmakers that do not source at least 65 percent of their parts from the Brazil, other nations in the Mercosur trade bloc or Mexico. The tax increase is effective through December 2012.
Oct. 27, 2011: Mantega announces lifting of the debt limit for 10 states by a total of 15.7 billion reais.
Nov. 10, 2011: Rousseff announces lifting the debt limit for seven additional states by a total 21.3 billion reais.
Nov. 11, 2011: Brazil’s central bank cuts capital requirements for some consumer loans with maturities of as much as five years, including car loans.
Dec. 1, 2011: Mantega announces that the IPI tax on appliances will be cut to 0 percent to 10 percent, from 4 percent to 20 percent previously, until March 31.
The government also suspends the IOF transaction tax on foreigners’ purchases of stocks, reduces the IOF tax charged on consumer loans to 2.5 percent from 3 percent, and lowers sales taxes on basic foodstuffs.
Feb. 16: Government raises debt limit for three additional states by total of 2.3 billion reais.
March 15: After Brazil expressed concern about its growing trade deficit with Mexico in automobiles, Mexico’s economy minister announces the two countries agreed to cap car imports from Mexico for three years.
March 16: Rousseff removes IOF tax on currency derivatives for exporters.
March 26: Mantega announces extension of IPI tax cut for appliances until June 30. Also eliminates the 15 percent IPI tax on furniture, and cuts taxes on wallpaper and light fixtures.
April 3: Mantega announces expansion of the 20 percent payroll tax elimination through 2013 to include a total 15 industries. Also announces expansion of subsidized lending by state development bank BNDES, and says government will prioritize buying locally manufactured pharmaceuticals, biopharmaceuticals, backhoes and graders that cost as much as 8 percent to 25 percent more than imported goods.
May 21: As part of the Bigger Brazil Program, Mantega announces a further cut in the IOF transaction tax to 1.5 percent from 2.5 percent, and lower reserve requirements for banks’ car loan portfolios.
Mantega also announces cut in the IPI tax on vehicles to a range of 0 percent to 6.5 percent, depending on engine size, from a previous range of 4 percent to 13 percent.
June 14: Rousseff pares IOF tax on overseas loans with maturities as long as two years, as opposed to maturities as long as five years previously.
June 15: Mantega announces tax reductions for public-private partnerships, and that BNDES will lend as much as 20 billion reais to states in order to boost infrastructure investment.
June 27: Mantega announces a 6.6 billion reais increase in Brazil’s budget to purchase tractors, buses, trucks, other vehicles and equipment from local manufacturers.
The government also cuts the rate that BNDES charges on loans, known as TJLP, to 5.5 percent from 6 percent, where it had remained since July 2009.
June 28: Central bank halves the rate of additional reserve requirements on banks’ demand deposits to 6 percent for lending to the agricultural sector for the 2012/2013 harvest.
June 29: Mantega announces extension of IPI tax cuts on furniture through Sept. 30, and on appliances through Aug. 31.
Aug. 15: Rousseff announces government will sell licenses to build and operate 7,500 kilometers of roads and 10,000 kilometers of railways, requiring as much as 133 billion reais investment over 30 years.
Aug. 29: Mantega announces extension of IPI tax cuts for vehicles through Oct. 31, and all other goods already receiving the tax cuts through year-end 2012.
Aug. 31: Rousseff announces that corporations will be entitled to accelerated depreciation on trucks and trains for purposes of calculating income tax.
Sept. 3: Finance Ministry increases debt ceiling for Rio de Janeiro state by 7.1 billion reais.
Sept. 4: Government raises tariffs on 100 products to as high as 25 percent, effective Sept. 26.
Sept. 13: Mantega announces elimination of 20 percent payroll tax for 25 additional industries, of which 20 are from the manufacturing sector, three from transportation and two from services.
Sept. 14: Central bank eliminates the additional reserve requirement rate for cash deposits, which had been at 6 percent, and reduces the rate for time deposits to 11 percent from 12 percent starting Oct. 29.
Oct. 4: Rousseff decrees local content, energy efficiency and investment requirements for carmakers. Manufacturers whose cars exceed the government’s efficiency requirements can earn as much as two percentage points in IPI tax reductions from 2017 to 2020.
Oct. 24: Rousseff also announces an extension until year-end for the IPI tax cuts on car purchases. Also decrees release of 1.95 billion reais for states and cities to boost exports.
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