Rousseff signs bill cutting taxes on tablets

Thursday, October 13, 2011

Brazilian President Dilma Rousseff has signed a bill enabling tax breaks for tablets produced in the country, federal news agency Agência Brasil reported.

The tax breaks could help reduce tablets' final cost for consumers by more than 30%.

The bill had already passed through congress in September and was awaiting the presidential stamp of approval. The measure offers manufacturers full exemption from the PIS and Cofins welfare taxes.

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Rousseff approved the bill but vetoed one item, removing a clause that would make the law retroactive to May 20. The bill thus goes into effect once published in the official gazette.

In addition to the tax breaks, the bill also increases from 4.6% to 5.6% the Cofins credit for tablets when they are purchased from companies located at the Manaus industrial hub in Amazonas state's free trade zone.

The tablet bill is included in the so-called basic productive process (PPB) regime, which provides tax exemptions and fiscal benefits to companies interested in local production using national basic components, thus enhancing local suppliers' business.

According to the science and technology ministry, the PPB authorization has been officially granted to computer makers Positivo, MXT Industrial and AIOX do Brasil Equipamentos de Informática, plus US firm Motorola and the Korea's Samsung. The ministry says more than 25 companies have requested PPB authorization.

Brazil will end 2011 with sales of some 450,000 tablets, 4.5 times more compared to last year, when 100,000 units were sold, according to a report from consultancy IDC.