Rousseff’s Stimulus Measures to Spur Brazil Economy: Timeline
June 12: Rousseff announced subsidized credit totaling 18.7 billion reais ($8.8 billion) for 3.4 million low-income families in the country’s Minha Casa, Minha Vida housing program to purchase furniture and home appliances.
May 17: The Finance Ministry authorizes a loan of 1.43 billion reais to Amapa state from state development bank BNDES and a 599-million reais loan to Piaui state from state bank Banco do Brasil.
May 7: Rousseff issues a decree to give tax reductions and low-cost credit to ethanol mills starting at the end of August. Mantega said two weeks earlier the government would grant 970 million reais in credits to offset a 0.12 real per liter tax on ethanol, offer 4 billion reais in loans for crop renewal this year, and a 2 billion-real line of credit for ethanol stockpiling. Mantega also said the government would reduce the PIS/Cofins taxes for the chemical industry to 1 percent from 5.6 percent. It will remain at 1 percent until 2015 and be removed gradually through 2018.
April 30: Brazil’s national monetary council reduces loan rates to 3.5 percent from 5 percent for the so-called Transformational Projects that target technological and productive capacity, and form part of the government’s PSI investment program.
April 1: The finance ministry extends until the end of the year a tax cut on car sales that would have expired. The so-called IPI tax on cars was scheduled to increase from 2 percent to 3.5 percent on April 1. The measure will cost the government 2.2 billion reais in tax revenue from April to December.
March 9: Rousseff announces the elimination of the 9.25 percent PIS/Cofins taxes on staple foods. The measure, which will reduce tax revenue by 7.3 billion reais annually, is intended to increase consumption of food and other goods while helping to boost economic growth. Rousseff also eliminated the IPI tax for soap and sugar.
Dec. 27, 2012: Brazil’s central bank eases reserve requirements on large banks. Banks with a minimum of 6 billion reais in total equity that provide credit for capital-goods investment may deduct as much as 20 percent of reserve requirements for their so-called “on call” deposits that can be withdrawn at any time.
Dec. 24, 2012: Rousseff’s Cabinet chief Gleisi Hoffmann announces reduction of taxes on income from profit sharing programs.
Dec. 19, 2012: Mantega announces the extension of IPI tax cuts for automobiles, furniture, appliances and other goods through June, though at lower levels. Tax cuts for automobiles will ease gradually from January to June, and in February for other goods. Tax cuts for some goods, such as trucks and washing machines, will remain in place.
Mantega also announces that retailers, excluding supermarkets, will be exempt from payroll taxes starting in April. This brings the number of sectors receiving the tax benefit to 42.
Dec. 18, 2012: The central bank eases reserve requirements on short dollar positions. Financial institutions will be required to collect reserve requirements on short dollar positions above $3 billion, up from the previous $1 billion level.
Dec. 6, 2012: Ports Secretary Leonidas Cristino announces a plan to increase private investment in the port system. The plan entails a new regulatory framework and investment of 54.2 billion reais through 2017, and includes a line of financing for port investments at the long-term lending rate, known as TJLP, plus up to 2.5 percent with a three-year grace period. The ports of Manaus, Porto Sul, Espirito Santo, Ilheus and Imbituba will be offered for private concession.
Dec 5, 2012: Mantega announces that state development bank BNDES in January will cut its TJLP lending rate to 5 percent from 5.5 percent. He also says BNDES will extend for another year by 100 billion reais an emergency credit line established during the 2009 credit freeze to fund the purchase of capital goods. Private banks can join the lending program by counting up to 15 billion reais in loans against deposits they’re required to hold at the central bank.
The central bank reduces the maturity of foreign loans subject to a 6 percent tax to one year from two years.
Dec. 4, 2012: Mantega announces exemption of payroll tax and reduction of other taxes for civil construction. The tax relief for the sector totals 2.85 billion reais annually and the government will offer a line of credit to help finance new construction.
The central bank exempts exporters from a 6 percent IOF tax on loans under advanced payment agreements if they mature within 5 years.
Oct. 24, 2012: Rousseff 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.
Oct. 4, 2012: 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.
Sept. 14, 2012: 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.
Sept. 13, 2012: 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. 4, 2012: Government raises tariffs on 100 products to as high as 25 percent, effective Sept. 26.
Aug. 31, 2012: Rousseff announces that corporations will be entitled to accelerated depreciation on trucks and trains for purposes of calculating income tax.
Aug. 29, 2012: 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. 15, 2012: 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.
June 29, 2012: Mantega announces extension of IPI tax cuts on furniture through Sept. 30, and on appliances through Aug. 31.
June 28, 2012: 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 27, 2012: 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 15, 2012: 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 14, 2012: Rousseff pares IOF tax on overseas loans with maturities as long as two years, as opposed to maturities as long as five years previously.
May 21, 2012: 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.
April 3, 2012: 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.
March 26, 2012: 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.
March 16, 2012: Rousseff removes IOF tax on currency derivatives for exporters.
March 15, 2012: 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.
Feb. 16, 2012: Government raises debt limit for three additional states by total of 2.3 billion reais.
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.
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.
Nov. 10, 2011: Rousseff announces lifting the debt limit for seven additional states by a total 21.3 billion reais.
Oct. 27, 2011: Mantega announces lifting of the debt limit for 10 states by a total of 15.7 billion reais.
Sept. 15, 2011: 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.
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.
March 3, 2011: Alessandro Teixeira, deputy trade minister, announces the Treasury will lend an additional 55 billion reais to state development bank BNDES.
To contact the reporter on this story: David Biller in Rio de Janeiro at firstname.lastname@example.org
To contact the editor responsible for this story: Andre Soliani at email@example.com