Federal Government announces measures to reduce the impact of coronavirus on the economy

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Last Monday, 03.16.2020, measures were announced by the Federal Government to try to reduce the impacts of the coronavirus on the economy and on Brazilian population life.

According to the Minister of Economy, BRL 147 billion will be used in measures to help the economy and the most vulnerable population, of which R$ 83 billion should be allocated to the poorest population and the elderly.

For the elderly, one of the announced measures is to bring the payment of the 13th salary for retirees and pensioners to April and May of this year. For the poorest population, the amount of BRL 3 billion will be released to “Bolsa Família”, with the inclusion of more than 1 million families in the program.

For companies, which are also being severely affected by the coronavirus, the postponement of the payment of Simples Nacional[1] and the deposit of the Guarantee Fund for Time of Service (FGTS) of workers for 3 months was announced. In addition, contributions to the S[2] system will be cut in half.

In addition to the above measures, the Federal Government announced that:

(i)                will reduce the interest ceiling of loans for retirees and pensioners, increasing the margin and the payment term;

(ii)              will allow the transfer of amounts not drawn from PIS/Pasep to FGTS, to allow new withdrawals;

(iii)            will anticipate the salary bonus for June;

(iv)            it will defer the payment of Federal Government part in Simples Nacional for 3 months;

(v)              it will facilitate the clearance of imported industrial raw materials and raw materials before disembarkation; and

(vi)            it will simplify the requirements for contracting credit and dispensing with documentation (Debt Clearance Certificate – CND) for credit renegotiation.

To combat the pandemic, the Government announced that will:

(i)                suspend the proof of life of INSS beneficiaries for 120 days;

(ii)              give tariff preference for products for medical and hospital use;

(iii)            prioritize the customs clearance of products for medical and hospital use;

(iv)            allocate the balance of BRL 4.5 billion from the DPVAT fund to SUS;

(v)              zero import rates for products for medical and hospital use until the end of the year; and

(vi)            temporarily exempt from IPI for listed imported and domestic goods that are necessary to combat Covid-19.

Complementing the above measures, in a statement released by the Brazilian Federation of Banks – Febraban[3], the 5 largest banks in the country[4] reported that they will be open and committed to meeting requests for an extension, for 60 days, of the debt maturities of customers and microenterprises/small enterprises, whose benefit will be applicable only to current contracts whose payments are up to date and limited to the amounts already used.

Finally, is was announced that the Federal Government has asked the National Congress to recognize the state of public calamity, so that more financial resources can be allocated to fight against the pandemic and so that the Government is no longer obliged to comply with the fiscal target this year, without constituting a breach of the Fiscal Responsibility Law. The request has already been approved by the Chamber of Deputies and is now going to the Senate for analysis.

(11) 3707-8370

[1] Simples Nacional is a shared tax collection, collection and inspection regime applicable to Micro and Small companies, provided for in Complementary Law No. 123, of December 14, 2006.
[2] According to the Senate website, the S system is the term that defines the set of organizations of corporate entities focused on professional training, social assistance, consultancy, research and technical assistance. Is part of the S system the National Service for Industrial Learning (Senai); Social Service of Commerce (Sesc); Industry Social Service (Sesi); and the National Trade Learning Service (Senac). There are also exist: National Rural Apprenticeship Service (Senar); National Cooperative Learning Service (Sescoop); and Social Transport Service (Sest).
[3] https://portal.febraban.org.br/noticia/3421/pt-br/ (accessed on 03.17.2020)
[4] Banco do Brasil, Bradesco, Caixa, Itaú Unibanco and Santander.


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