Home / Knowledge / News / Textiles / Payroll tax rolled back for textile firms
Payroll tax rolled back for textile firms
03
Aug '11
Textile manufacturers in Brazil will no longer have to pay a 20 percent payroll tax. This was among a basket of measures announced by the Government to protect the country's manufacturers from a rally of its currency, the Real.

The measures include a cut in taxes, tightening of trade barriers and increase in lending. The announcement was made by President Dilma Rousseff's Government after the country's industrial output declined 1.6 percent in June, which is the second biggest decrease since 2008. The contraction in industrial production is about four times more than that expected by analysts.

The Real has rallied 48 percent since the end of 2008 and 6 percent in the past six months, leading to a surge in imports from China. The increase in the value of Brazilian currency has led to increased complaints of excessive costs by businesses and a fall in the cost of imports.

The package of tax breaks called 'A Bigger Brazil' will cost 25 billion real or US$ 16 billion to the Government over the next two years. It includes a mandate to Government bodies to favour domestic suppliers, even if their bid is higher than the foreign firms.

The rollback of 20 percent payroll tax will be presently applicable to textile firms, shoe manufacturers, software companies, and furniture makers, according to Finance Minister Guido Mantega. He said that the benefit will be extended to other sectors and the Government will offset its loss by raising an additional 1.5 percent tax on companies' sales.

Besides the rollback of payroll tax, the Government has announced that exporters of industrial goods will be provided with tax credits equal to 0.5 percent of their exports, which would later be raised to 3 percent.

The Government further plans to quicken the repayment of credits owed to firms, tighten anti-dumping regulations, and continue the present tax breaks for a year on the purchase of capital goods.

The Finance Minister said that the Government will ask the countries in the Mercosur trade bloc, including Argentina, to hike duty on about 100 items as a measure to protect against cheaper imports.

The domestic demand has remained robust as Brazil last year registered the highest economic growth in two decades. But the currency rally is putting pressure on industrial production. While the manufacturing of consumer goods declined 2 percent in June, production of capital goods too fell 1.9 percent. Overall, 20 of the 27 industrial sectors witnessed a reduction in output during the month.

In May this year, the Sao Paulo Industrial Federation had forecasted that the country's trade gap in manufactured goods will widen to US$ 100 billion in 2011 from US$ 71 billion in 2010.

This trend was substantiated by a survey of 1,569 companies released recently by the National Industrial Confederation, which says that nearly 50 percent of Brazilian exporters lost their overseas market share in the past 12 months.

Fibre2fashion News Desk - India


Must ReadView All

Sri Lanka to set up 150 mini apparel units

Apparel/Garments | On 23rd Nov 2017

Sri Lanka to set up 150 mini apparel units

A mini apparel factory was opened recently at Sri Lanka’s Menik Farm...

Egypt keen to boost ties with India in MSMEs, textiles

Textiles | On 23rd Nov 2017

Egypt keen to boost ties with India in MSMEs, textiles

Egypt is eager to boost cooperation with India, particularly in the...

India begins review of anti-dumping duty on caustic soda

Textiles | On 23rd Nov 2017

India begins review of anti-dumping duty on caustic soda

The Directorate General of Anti-Dumping & Allied Duties (DGAD), under ...

Interviews View All

Pinkesh Jain
Everflow Petrofils Ltd

‘An innovative technology which India needs desperately is the...

Sunil Kumar Sharma
Loknayak JPNSSSG Ltd

'The blend of cotton–linen yarn has high demand in the domestic and...

Manuj Terapanthi
Texaura

Transparent supply chain and fair trade will boost sustainable market

Anupam Arya

<div>Jaipur-based Fabriclore Retailing Pvt. Ltd. is attempting to revive...

Erik Sy

Manila-based CustomThread is a start-up offering premium custom apparel...

Abhishek Pachauri

Reckon Industries adapts latest systems for manufacturing from designing...

Eric Scholler
Groz-Beckert

The Indian market has huge potential in technical textiles, and by far,...

Johan Berlin
InvestKonsult Sweden AB

Investkonsult Sweden AB has been buying and selling second-hand textile...

Suresh Patel
Sidwin Fabric

Sidwin Fabric is a manufacturer and exporter of polypropylene textiles and ...

Anisha Chaudhari
Threads & Shirts

Threads &amp; Shirts is a freshly-tailored concept providing men/women a...

Tony Ward
Tony Ward

"You have to truly understand what your client wants, know her needs, what ...

Akta Adani
India Boulevard

India Boulevard is a San Francisco-based curated fashion marketplace that...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

November 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Active Poll

Do you see sustainability as a route to business growth?

Yes
68.5%
No
12.4%
Skip
19.1%

Total Votes: 89

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Active Poll

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes
61.8%
No
30.3%
Skip
7.9%

Total Votes: 89

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Active Poll

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes
86.5%
No
10.1%
Skip
3.4%

Total Votes: 89

Thanks for your valuable feedback. Claim your free latest sustainability e-book.

Active Poll

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes
80.9%
No
9.0%
Skip
10.1%

Total Votes: 89


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search