SAO PAULO, June 5 (Reuters) - Brazilian food exporter
lobbies on Wednesday blasted the government's executive order
imposing new rules for use of tax credits, claiming the rules
are unconstitutional and will make companies less competitive on
global markets.
The backlash against the measure announced Tuesday
represents the latest test in President Luiz Inacio Lula da
Silva's shaky relationship with the powerful agribusiness
sector, which had supported his predecessor Jair Bolsonaro.
Brazil is the world's largest exporter of commodities
including coffee, beef, chicken, sugar and soybeans.
ABPA and ABIEC, which represent meat giants like JBS
and BRF, said the measure will oblige
companies to rely more on banks for credit, boosting expenses
and burdening their operations.
"The effect on production costs is direct and immediate,"
their statement said, adding the move could trigger food
inflation and job losses in Brazil.
The government said it is merely trying to close loopholes
that benefit several industries, as it seeks to raise almost 30
billion reais ($5.66 billion) to eliminate the budget primary
deficit this year.
The most affected sectors include pharmaceuticals, meat,
fruit, coffee, cereals and biodiesel.
"In addition to making Brazil a major exporter of tax
residues, [the executive order is] in total breach of the
Constitution regarding tax exemption for exports," coffee
exporters lobby Cecafe said.
Anec, which represents grains and cereals exporters in
Brazil, did not immediately reply to a comment request. Neither
has Abiove, which speaks for soy crushers including Bunge
and Cargill with local operations.
Biodiesel lobby APROBIO, which uses soy as a basic raw
material, said it will try to convince the government to
reconsider the measure to protect investments and safeguard the
country's efforts to transition into clear energy sources.
($1 = 5.3002 reais)