The idea of extending the tablet’s fiscal benefits also to smartphones should accelerate the implementation of new device manufacturing plants (Huawei and Alcatel One Touch) in Brazil. Brazil’s telecommunications ministry, Paulo Bernardo, is putting together a petition for smartphones to be granted tax exemptions. With that measure the Brazilian federal government’s objective is to reduce prices in about 25%.
“We want to incentivize smartphone’s local production. Classes C, D and E consumption dream is to have cell phones with internet and Wi-Fi access, therefore we think we should make an effort to reduce prices for those consumers” reiterated Paulo Bernardo. The Minister mentioned that there are already USD 115 smartphones on the market, but this value would be reduced to USD 85 with the new proposed tax incentive.
“Our goal is to strongly stimulate mobile internet. Most people already have mobile devices. With more affordable smartphone prices they are bound to change old mobile devices for mobile internet enable devices.”
Manufacturers are very excited with the prospect of seeing this government proposal approved. According to Marcelo Najnudel, Huawei’s marketing manager, this proposal being approved will accelerate Huawei’s plans to have local manufacturing in Brazil. Alcatel One Touch’s president, Marcus Daniel, the benefit will help the Brazilian government’s political objective to broaden the internet offer to all portions of the population.
According to the existing “Law of Good”, industrial taxes (PIS/COFINS) are reduced from 9, 25% to zero, but in order to be granted the fiscal benefit, the manufacturer must initially produce the device with at least 20% of local content, reaching 80% of local content in 3 years time.