The Brazilian Association of Airline Companies (Abear) and eight other sector entities released a manifesto on Monday night demonstrating “concern” with Bill 2337/21, which deals with changes in the income tax in the context of the Tax Reform . According to Abear, the end of the PIS/Cofins and import tax exemption for aircraft parts and parts “threatens the sector’s ability to resume as of 2022”, by generating an additional cost of approximately R$ 5 billion per year , considering general aviation and other members of the air transport chain.
“The bill ends these two historic exemptions, which must be more than 30 years old, and goes against Brazil’s reinsertion on the path to recovery,” he told the broadcast the president of Abear, Eduardo Sanovicz.
According to the official, these taxes are not levied on the foreign market and the decision to exempt companies in the sector in Brazil is due to the high operating costs in the country, notably with aviation kerosene and the tax burden in general.
According to the manifesto, the additional billion-dollar cost per year may be generated because PL 2337/21 reestablishes PIS/COFINS on import and sale in the domestic market of aircraft, parts and spares and maintenance services and Import tax and Tax on Products Industrialized (IPI) on parts and pieces and a series of elements necessary for aircraft maintenance.
According to Abear, there would be an additional R$ 3 billion per year in commercial aviation and another R$ 2 billion in other areas, such as agricultural aviation. “If by itself the resumption of these taxes would have a strong impact on the airline industry, promoting them in this scenario of fragility of commercial aviation and the soaring of the dollar, when 50% of regular transport costs are dollarized, is disproportionate to an economic activity of this importance”, says the manifesto.
The text also highlights that the potential negative impact “will not be offset by the reduction of the IRPJ (Corporate Income Tax) on profit, since in this context of health crisis and recovery, aviation companies have not been operating profitably.” Regarding the import of aircraft parts and pieces, the sector justifies that “there is no similar national in the country.”
For the partner of ASBZ Advogados, Alexandre Gleria, aviation has historically received tax incentives in Brazil, but now, the government demonstrates that it wants to end with differentiated treatments. “The tax reform bills were not sensitive to the airline industry because the government has been trying to eliminate incentives for certain activities in the economy”, says the specialist in tax law.
The president of Abear emphasizes that the sector has been proactively dialoguing with government actors, who “have listened to the considerations”. According to the broadcast, some entities linked to aviation should meet in the next few days to discuss the subject.
In addition to Abear, the document is signed by the Latin American and Caribbean Air Transport Association (ALTA), the International Air Transport Association (IATA), the Board of Representatives of International Airlines in Brazil (JURCAIB) , the Brazilian Association of General Aviation (ABAG), the Brazilian Association of Auxiliary Services to Air Transport (ABESATA), the National Union of Airline Companies (SNEA), the National Union of Air Taxi Companies (SNETA) and the Union National of Agricultural Aviation Companies (SINDAG).
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