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Mumbai, 7 Jun (Commoditiescontrol):Brazilian soybean and cotton companies joined biofuels and food lobbies to oppose new tax credit rules proposed by President Lula's administration. The rules, aiming to tighten tax credit use, face backlash from agribusiness, potentially affecting Congressional approval within four months.
Key Points:
Impact on Soybean Market: Slow market activity and concerns about competitiveness, with potential price drops for soy growers by up to 5%.
Financial Concerns: National lobby Aprosoja fears losing 6.5 billion reais ($1.24 billion) in tax credits.
Industry Reactions: Arlan Suderman of StoneX highlights higher tax costs and lower margins for processors, with a potential shift in biofuel activity to Argentina and the US.
Exporters' Response: Anec and Anea deem the measure a "grave institutional setback" and call for Congressional rejection or debate.
Brazil's Finance Ministry, in a June 4 announcement, aims to close tax loopholes, potentially raising 29.2 billion reais ($5.4 billion) by 2026 to help reduce the primary deficit. The changes affect various sectors, including pharmaceuticals and food products, by revising PIS-Cofins tax credits.
(By Commoditiescontrol Bureau: 09820130172)
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