BRASILIA: The Brazilian senate has passed a bill to reduce the tax burden on imports of certain components and machinery used in the production of PV equipment.
The tax reduction is set to aid companies looking to set up PV equipment manufacturing in the country, however, the ruling still requires the sanction of the President Dilma Roussef, Bruno Leonardo D´Aguiar Silva, partner at market and legal advisory firm Bridges to Brazil, told PV Tech.
He said the new ruling also improves on a previous government incentive programme for the semiconductor industry, the Programa de Apoio ao Desenvolvimento Tecnológico da Indústria de Semicondutores (PADIS), because companies involved in the programme must now also invest 3 to 5% of their income into technology research and innovation initiatives in Brazil.
Silva said that while the tax reduction would benefit foreign manufacturers looking to set up in Brazil, they would be benefitted further by a number of other factors still being addressed, including a reduction in state taxes on goods and services, known as the ICMS. This is a more complex issue because it involves each individual state.
Silva added: “At the moment, companies are discussing independently with the state governments trying to get better conditions to set up [their] production in Brazil.”
On another note, Silva said that with a tax reduction, final prices in Brazil’s upcoming solar project auctions would be reduced and this would make the market more competitive.
He said the ruling is positive because it shows Brazil moving for the development of a PV manufacturing market, although this movement is “not as fast as expected”.
Nevertheless he added that it was “giving signs that the development of Brazilian technology production is a part of the agenda of the legislative and executive branches”.
