UPDATE: Brazil Announces Tax Breaks For Furniture Sales
(Adds details and comments from finance minister.)
BRASILIA -(Dow Jones)- Finance Minister Guido Mantega on Wednesday announced
tax breaks for consumers buying most types of furniture, urging Brazilians to "
buy new chairs and tables for Christmas."
Mantega said the IPI industrial products tax for most types of furniture will
be reduced to zero starting immediately and continuing through March 31.
Previously, the IPI tax varied from 5% to 10% over wholesale prices of
furniture.
The measure joins a list of similar tax cuts for other consumer products,
including motor vehicles and home appliances, among others.
Mantega said the government was adopting the tax cut for furniture because it
was "a neglected area." He added, "Furniture manufacturers are heavily dependent
on exports, which have not recovered. We thought it was time to do something for
this industry."
He also announced an extension of existing tax cuts for building materials
through June 30. The cuts were originally due to expire on Dec. 31.
Brazil's government began the process of cutting taxes on sales of many
consumer goods at the end of 2008 as a way to maintain consumption and
production during the global economic crisis.
But tax cuts on motor vehicles and home appliances are now being phased out as
Brazil's economy shows signs of a rebound. The economy expanded 1.9% in the
second quarter of 2009 against the first quarter, following two straight
quarters of decline.
Third-quarter gross domestic product figures are due for release on Dec. 11.
The third quarter is widely expected to show an even faster rebound than the
second quarter.
-By Gerald Jeffris and Tom Murphy, Dow Jones Newswires; 55-11-2847-4519;
brazil@dowjones.com
(END) Dow Jones Newswires
11-25-091314ET
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