Special Incentive Regime for specific sectors of transportation and energy areas

The Committee on Economic Development, Industry and Commerce approved the bill specifying transportation and energy sectors which can take advantage of the Special Incentives Regime for the Development of Infrastructure (Reidi). That special taxation system was created to reduce costs in infrastructure projects in the transportation, port, energy, basic sanitation and irrigation sectors.

The Bill 2641/07, from the Deputy Ricardo Barros (PP-PR) received a favorable review from its rapporteur, Jilmar Tatto (PT-SP). He presented an amendment, including in Reidi all sectors related to the Growth Acceleration Program (PAC). Among the activities included in the text, are the exploitation, development and production of renewable fuels and petrochemical products.

Detailed description
According to the Bill 2641/07, the incentives of Reidi should comprehend the construction of oil ducts, gas ducts, mineral ducts, highways, railways, waterways, urban trains and ports. Regarding projects in the power area, hydraulic, wind, nuclear, solar and thermal generation by any means, in addition to co-generation, transmission and distribution.

According to the Deputy Jilmar Tatto, there is an “extreme need to specifically describe it in the Law”, the sectors of infrastructure development to be included in Reidi, since it will allow strategic investments in gas ducts and in other undertakings on power generation.

According to him, the Decree 6177/2007, which regulated Reidi, does not include among the projects on power transmission and generation, the gas ducts and undertakings on natural gas production. That prevents the application of the special regime to several projects that are already contained in the Growth Acceleration Plan, in addition to hampering the reach of the objectives of the program.

Other changes
The bill provides also that the special regime should benefit whoever has an approved project for the enhancing of the production capacity, with the objective to fulfill the proposals on the implementation of infrastructure works.

The project defines that the tax incentive should be granted only if there is no similar domestic product in the case of sale or import of machines and equipment and of hardware for infrastructure works.

The benefits in the case of purchase and import of those pieces of equipment are currently valid for five years, but the bill allows that period to be lengthened for as long as the work lasts. Some infrastructure works, such as hydroelectrical power plants, are almost never concluded in five years.

Procedure
The bill will still be reviewed in conclusive character by the Committee on Finances and Taxation; on the Constitution and Justice and Citizenship (CCJ).