State government cut benefits in April; measure was revoked after the floods and comes into force from June 1st
Starting this Saturday (June 1, 2024), essential products in the basic food basket in Rio Grande do Sul will once again have tax benefits. Decree No. 57,621 published by the State government on May 15 revoked the measure which removed food benefits from the basic food basket. Here’s the complete of the decree (PDF – 105 kB).
The executive director of Fiscal Mix, Fabricio Toneguttistates that the measure makes it possible to freeze food prices, as there would be a predicted increase in taxes, making them more accessible to flood victims in the State.
The expert says that, if the government had not revoked the measure, the value of products in the basic basket would have increased their final price for the consumer by at least 10%.
“With the tragedy that happened in Rio Grande do Sul, the government went back. They were unable to maintain an increase in the tax burden, which in practice would generate terrible challenges for a population that is already facing one of the greatest tragedies in its history”it says.
In April, the government of Rio Grande do Sul announced the cut in tax benefits for basic food products. The measure was implemented after the State Legislative Assembly twice rejected the Executive’s proposals to increase the ICMS (Tax on the Circulation of Goods and Services).
The change in the basic food basket determined the tax increase from 7% to 12%. With the decree published on May 15th, products will once again be taxed at 7% from June 1st.
“Increased taxation would generate greater government revenue, especially at a time when any extra revenue in public accounts would be useful for rebuilding the state and infrastructure. But on the other side of the coin, we have the population, who would not be able to afford their food if the adjustments were applied. It really is a challenging scenario for all sides”says Tonegutti.
Here is the list of products in the basic basket:
- sugar;
- rice;
- pork lard;
- potato;
- roasted and ground coffee, except capsules;
- meat and edible products, including salted, chilled or frozen, such as chicken and pork, except wild boar, beef, sheep and buffalo;
- onion;
- fresh fruit preserves, except almonds, hazelnuts, chestnuts and walnuts;
- wheat flour;
- bean
- fresh vegetables and greens;
- milk;
- margarine and vegetable creams;
- vegetable oils;
- eggs;
- bread;
- fish, except adoque, cod, hake, pirarucu and salmon;
- salt.
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