Tax reform concerns the Brazilian agribusiness as input costs can fractionate their margins.

The tax reform PEC 45/2019 that goes through the National Congress, shall drastically impact the agro sector if approved with the current text. It is analyzed that the reform would eliminate all types of tax benefits for all segments an not exclusively related to the agribusiness

That being said the text proposes a single rate of 25% for all goods and services, which would increase the prices of agricultural inputs and, consequently, the production costs of the rural producer. The agribusiness related institutions and organizations need to pay more attention to this proposal being pleaded, as it is very harmful to the sector, of which is one of the main export drivers in the country trade balance spectrum nowadays.

Finally, the coordinator of the CNA Economic Center pointed out that not only PEC 45/2019, but PEC 110/2019, from the Senate, and Bill 3887/2020, from the Federal Government, would impact negatively on budgetary costs of production, requiring greater cash flow.

With the single rate of 25%, the cost of producing soybeans and corn produced in the municipality of Sorriso (MT) for instance would increase by 19.4%. The coffee produced in the South region of Minas Gerais would increase costs by 19.3%. Not to mention prominent industries trying to develop and/or retrieve their international relevance as the tomato and cocoa respectively.