Taxes hold back expansion
The average of taxes included to industrialized food reaches up 37%
Brazil is the country which greatest tax burden on food products. The average national tax burden, included to industrialized food prices, reaches 37% at retail end. It means that in final price of processed food, more than one third corresponds to tax accumulation. Thirteen federal, state and local taxes are incident on victuals, which added to various levies and contributions, make up nothing less than 44 taxes.
What calls attention the most is that, in a country showing such great income disparity and great population contingent below poverty line, tax impact on victuals is much stronger on classes with lower purchasing power, in view of importance and relevance of food expenses for poorer families. Low income citizens spend, according to Brazilian Institute of Geography and Statistics - IBGE- data 40% of monthly budget in food.
By analyzing international practices it is shown that the majority of the countries does not tax foods, or practices low aliquots. In majority of cases, the International practice for food taxation is 7% to 8% on final price to consumer.
United Kingdom, Portugal, Ireland, Switzerland, for example, exempt food from taxation. Germany, Spain, France, Netherlands, Belgium, Italy practice aliquots between 5% and 8%.
Another aggravation is that taxes incident on food inhibits the growth of industrialized and in natura products market, especially among families whose income is in the range of three minimum wages. As fir in natura food, such as beans and others, taxes burdens reaches up 23% on product final price. In Brazil, the average consumption taxation reaches 22,41%; work income are levied in 25,21% and capital income 11,77%.
The Brazilian Association of Food Industries defends for years the need a tax reform including victuals discharge. ABIA considers construction of a favorable economic environment as basic priority, enabling Brazilian companies to compete under equal conditions, as much in domestic as in external market.
The association points out the current tax system as the main factor of so-called Brazil Cost, including obstacles opposed to of national production competitiveness.
ABIA defends that victuals taxation in Brazil is guided by the international standard, which adopts a sole aliquot (generally 7% to 8%) only incident one on victuals at retail end. Adoption of such international standard of non selective victuals taxation would potentialize the consumption power of low income classes, expressly extending the food market. It is estimated that such measure would generate 84 thousand jobs approximately in food , around 780 thousand jobs in agriculture and 15 to 20 thousand jobs in packing industry.
