BRASILIA (REUTERS) – The government will send to Congress measure to release from federal taxes investments in data center information technology, a plan that will be promoted by Finance Minister Fernando Haddad in the Silicon Valley in the coming days, four sources told Reuters.
Haddad departs on Friday to California, with a program that includes breakfast on May 6 with technology executives in Palo Alto, where he will present Brazil as a sustainable infrastructure hub, taking advantage of the country’s wide renewable energy supply.
The Ministry of Finance estimates that the new policy could unlock about $ 2 trillion in investments in the next decade, a figure that encompasses positive effects that should overflow to other sectors, such as construction, telecommunications and artificial intelligence services, according to two of the sources, which requested anonymity.
The Ministry of Finance did not respond to a request for comment.
The same sources stated that the planned investment on a Data Center in Northeast of Brazil by Bytedance, Chinese controller of Tiktok, will be one of those benefited by the measure, which will be edited via provisional measure, demanding Congress approval to become permanent.
The expectation is to send the proposal to parliamentarians until the end of this semester.
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The policy provides for the exemption of federal taxes – PIS, COFINS, IPI and Import Tax – on investments in capital goods linked to information technology for data centers, both sources said.
One of them pointed out that the main cost for these enterprises is not electricity – which in Brazil is mostly from renewable sources, with more than 80% of the energy generated by hydroelectric plants, solar and wind plants – but the depreciation of hardware, a significant weight against the complex and costly Brazilian tax system.
Investments not linked to information technology, such as building buildings, will not be exempt from the measure. With this, the expectation is that tax gains exceed the losses of collection, helping to reinforce, not to press, the federal budget from next year.
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In the midst of growing global tensions, including commercial tariffs imposed by the United States and its rivalry with China, the plan also seeks to explore Brazil’s traditional diplomatic neutrality as an attraction for foreign investors.
“We don’t fight with anyone. We are friends with everyone. This means that Brazil can serve the world without major obstacles,” said one of the sources.
A historic tax reform approved last year by the government of President Luiz Inacio Lula da Silva predicts exemptions on investments in capital, but only from 2033.
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The new measure, led by the Ministries of Development and Finance, aims to anticipate these benefits to stimulate investments in green data centers.
To qualify, projects must meet sustainability criteria, such as the use of 100% renewable energy. Other requirements will include the reserve of a significant portion of the capacity for the domestic market, even if the project focuses on export, as well as contributing to an artificial intelligence ecosystem support fund in Brazil.
