The Greater Brazil Plan, launched on August 2 by President Dilma Rousseff, outlines a new industrial, technological, service and foreign trade policy for Brazil. It reduces the 20% welfare tax to zero for sectors that are sensitive to the exchange rate and international competition and which are labor intensive: apparel, footwear, furniture and software. Besides payroll tax breaks, Greater Brazil, whose slogan is "Innovate to compete. Compete to grow," establishes a series of initial action ranging from tax breaks on exports, the creation of Reintegra (which pays back to manufactured goods exporters 3% of their export revenue along the same lines as an Income Tax rebate), to approval of the Government Purchasing Law, the strengthening of commercial defenses and the creation of special low tax rates for different sectors.

In addition, the industrial policy makes the National Economic and Social Development Bank (BNDES) responsible for financing innovation and investment. One of the main measures in this area is a R$ 2 billion credit line provided by Financing of Studies and Projects (FINEP), which comes under the Ministry of Science and Technology, to expand the bank’s innovation portfolio.

The National Industrial Development Council (CNDI), whose role is to propose national policies and specific measures to the President to promote the country’s industrial development, will establish the overall strategic guidelines for the Greater Brazil Plan and new measures are expected to be announced in the next few days.

10 Aug 2011