Project proposes tax incentives for Sudam and Sudene until 2028

The extension of incentives to companies installed in the areas covered by the Superintendencies for the Development of the Northeast (Sudene) and the Amazon (Sudam) is essential. This is the assessment of tax lawyer Jorge Lucas de Oliveira. The specialist explains that the benefits caused a kind of “cascading effect”, with the promotion of investments and job creation and that the withdrawal could have consequences.

“The natural consequence is a lower attraction of companies to settle in these areas, which will directly impact the reduction of job creation. In addition, the measure will imply an obvious increase in the tax burden of companies that are already installed there, which it could lead to a decrease in investments and even to the exit of these companies from that location”, he says.

Tax incentives for these companies in the areas covered by Sudene and Sudam end on December 31, 2023. The end of benefits could result in a drop in job creation and reduce the number of companies in the region, according to the specialist. In order to avoid this scenario, the bill is being discussed in the Chamber of Deputies 4416/2021 — which extends the incentives until 2028.

PL 4416/2021 awaits the opinion of the rapporteur, deputy Eduardo Bismarck (PDT-CE), at the Constitution, Justice and Citizenship Commission (CCJC). The author of the project, Deputy Júlio Cesar (PSD-PI), is confident that the text will be approved and transformed into law.

“It is an important project. Because the granting of these benefits, which is an option that companies have, instead of paying 100% of income tax, legal entities pay only 25%. And he invests 75% in undertakings in the Northeast and North. And only these incentives remain, which expire on December 31. This project of ours provides for the extension for another 5 years of these incentives for the North and Northeast regions”, says the deputy.

In justifying the proposal, Deputy Júlio Cesar estimates that the budgetary impact of extending the incentives is BRL 11.8 billion in 2023 and BRL 12.2 billion in 2024. According to Sudene data, between 2013 and 2022, More than 3,500 requests were approved. Incentivized companies generated more than 1.3 million jobs and reported investments of around R$ 294 million in projects in the Sudene area. In the period from 2013 to 2021, it is estimated that for every BRL 1 in tax breaks, BRL 7.92 were invested in the region.

The project proceeds conclusively — a procedure in which the proposal is analyzed only by the designated commissions. The text has already passed through the National Integration and Regional Development commissions; Finance and Taxation; and is now at the CCJC. If approved, it will be sent to the Senate for analysis.

Sudam and Sudene

Sudam and Sudene are part of the Federal Planning and Budget System and have administrative and financial autonomy. Linked to the Ministry of Integration and Regional Development (MDIR), the autarchy aims to promote the inclusive and sustainable development of the areas in which it operates, in addition to the competitive integration of the regional productive base in the national and international economy.

Headquartered in Belém, capital of Pará, Sudam’s operations cover the states of Acre, Amapá, Amazonas, Mato Grosso, Rondônia, Roraima, Pará, Tocantins and part of Maranhão. While Sudene operates in all states of the Northeast region and in part of Minas Gerais and Espírito Santo.