BRASILIA, March 14 (Reuters) - President Dilma Rousseff’s government plans to extend payroll tax exemptions to all Brazilian manufacturing industries to boost investment and growth in a stagnant economy, Trade and Industry Minister Fernando Pimentel said on Thursday.
“We are exempting a large part of Brazilian industry and hope to exempt all Brazil’s manufacturing industry by the end of this presidential term,” Pimentel told reporters.
Since last year, Rousseff’s government has given tax breaks to dozens of industries, such as carmakers and other durable goods manufacturers, to lower prices and bolster consumption. It exempted specific industries from payroll taxes, including the building sector, and plans to extend the exemptions to services.
Brazil has one of the most onerous and complex tax systems in the word that has burdened industries and stifled investment. Rousseff has tried to revive the economy with lower interest rates, tax breaks and other stimulus measures but companies have not responded as quickly as the government had hoped.
The government has been scrambling to reverse declining investment in a once-booming economy that grew only 0.9 percent last year, down from 2.7 percent in 2011 and 7.5 percent the year before.
Rousseff unveiled a 32.9 billion reais ($16.72 billion)investment plan to spur industrial technology innovation and raise the efficiency and competitiveness of Brazilian industry. The plan includes 20.9 billion reais in low-interest credit lines.
“We are committed to helping Brazilian industry and raising the rate of investment in our country,” Rousseff said.