Bernardo reaches an agreement with the Treasury Department on tax breaks for retail chains.
The tax exemption will cover PIS/Cofins taxes for network equipment, fiber optics, and civil construction, resulting in a tax waiver of approximately R$ 4 billion by 2014.
The Minister of Communications, Paulo Bernardo, said today that he has forwarded to the Ministry of Finance the draft bill for tax breaks for investments in network infrastructure for data transmission, which will now go to President Dilma Rousseff for consideration.
"We finalized the agreement with the Finance Ministry today, and the president is traveling next week. So, we expect the project to come into effect in the next few days," stated Bernardo, who did not rule out the possibility of a provisional measure, without giving further details, as he emphasized that this decision rests with the Chief of Staff's office.
The tax exemption will apply to PIS/Cofins (social security contributions) for network equipment, fiber optics, and civil construction, resulting in a tax waiver of approximately R$ 4 billion until 2014. In PIS/Cofins alone, the potential cost reduction is 10%, and there are also categories where equipment can benefit from national content requirements, as Bernardo explained. The agreement with the Treasury Department was the approval of the project, but the proposals would be analyzed by the Ministry of Communications.
The counterpart from investors is geographic coverage, in order to serve regions with low competitiveness in broadband services today.
"We have a great need for investment in fiber optics to form the backhaul (network backbone), and we know that the trend is for companies to invest in metropolitan regions, which are more competitive. Therefore, there is a requirement to consider regions with lower population density," said Bernardo, during a visit to the Futurecom event in São Paulo. Companies that invest in networks exclusively for their own use, such as a bank, for example, will also be excluded.
The minister made it clear that companies can invest wherever they are interested, but to access the tax exemption benefit they will have to present these counterparties. The total investment in network infrastructure planned by the Ministry of Communications is R$ 70 billion over the next four years, and with this tax exemption there is a possibility of bringing forward R$ 20 billion of that amount, according to the minister's calculations.