Governor of Brazilian state of Rio Grande do Sul, Tarso Genro has signed a decree providing for the reduction of value-added tax (VAT) or tax on circulation of goods and services (ICMS tax) from 17 percent to 12 percent on raw materials for production of finished items to the manufacturing industries of Rio Grande do Sul.
The initiative, to be implemented from August 1, 2013, represents the beginning of a process that would be extended to 18 sectors which would be affected by this decree including textiles, garments, hosiery, and dyes.
According to a press release, Governor Tarso Genro said the goal behind the reduction of the tax is to support local industries.
The state’s treasury secretary, Gregor Tonollier said the measure is taken to provide greater competitiveness to the industries of the state.
The president of the Federation of Chambers of Shopkeeper’s, Vitor Koch, said 40,000 companies would benefit from the government’s initiative and would be able to purchase inputs by paying 12 percent instead of 17 percent tax, and the benefit would be passed on to the consumers who purchase the final products.
Source:
http://www.fibre2fashion.com/news/textile-news/newsdetails.aspx?news_id=149236