Manaus Free Trade Zone criticizes possible tax benefit for video games | Business

The discussion about reducing taxes for electronic games and consoles produced in Brazil was not well received by all sectors. For representatives of the Amazonian industry, the measures will lead to job losses and hinder production in the Manaus Free Trade Zone.

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If passed in Congress or by national decree, the proposals would end 500 direct and indirect jobs in the region, which would stop producing 70,000 consoles a year. The projection is from consultant Saleh Hamdeh, from the Federation of Industries of the State of Amazonas (Fieam) and from the Center of Industry of the State of Amazonas (Cieam).

According to TeleSynthesis, Hamdeh fears that the Free Zone will lose exclusive incentives and will not be able to maintain companies like Sony, which makes the PlayStation, and Flextronics, which produces the Xbox for Microsoft.

“If these measures go ahead, there will be yet another deindustrialized segment and the consequent closing of jobs that have been hard-won,” said the consultant to the website. He also highlighted the fact that some measures put an end to the practice of treating games and consoles as superfluous goods.

The reference seems to be mainly to the Proposed Amendment to the Constitution (PEC) 51/2017, approved by the Senate Constitution, Justice and Citizenship Commission (CCJ). The text prohibits taxes for games and consoles produced in Brazil and includes the segment in a “tax immunity” list, which includes books, newspapers, CDs and DVDs and religious temples.

The government is also studying the reduction of IPI (Tax on Industrialized Products) for electronic games and consoles. The rate for consoles, for example, would drop from 50% to 40% due to an initial proposal by the Ministry of Economy.

The measure would be adopted through a presidential decree and the figures can still be revised. The government, however, estimates that the current tax reduction proposal would make it stop earning R $ 50 million by 2021.

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