Brazil to abolish taxes on food staples - president

BRASILIA Tue Feb 5, 2013 10:04am EST

BRASILIA Feb 5 (Reuters) - Brazilian President Dilma Rousseff's government plans to eliminate all federal taxes on staple foods, the latest in a series of tax cuts aimed at curbing inflation.

Rousseff said on a radio talk show on Tuesday that federal taxes have already been scrapped for rice and beans, the Brazilian worker's staple meal, but other basic foodstuffs will also be exempted from taxation.

"These taxes must be removed, especially on the basic food basket," Rousseff said on a local radio station in Parana state.

Tax cuts and exemptions have been a prime tool used by Rousseff's economic team to revive stagnant economic growth and control inflation. Economists say inflation is speeding up after ending 2012 at 5.8 percent.

The government will update the list of 13 products in the basket of goods deemed essential for a Brazilian family to live for a month, which has not changed for years, she said. Besides rice and beans, it includes bread, butter, meat, milk, coffee, sugar, oil, potatoes, tomatoes, bananas and manioc flower.

"Since the basic basket law is so old, we are updating the list of products so that we can eliminate all federal taxes on them," Rousseff said.

She said the federal government had not been able to convince state governments to join the move by scrapping their own additional local taxes on staples. (Reporting by Anthony Boadle; Editing by Peter Murphy and Jim Marshall)

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