The end of income tax exemption on income of real estate credit letters (LCIs) and agribusiness letters of credit (LCAS) has generated concerns in the agricultural sector. While the government seeks to increase revenue, the market fears investor escape and the earnings of credit.
Rodrigo Valadares, federal deputy for the Union of Sergipe, in an interview with CNN Brazil, expressed his concerns about the impact of this measure. According to him, the taxation of these investments can discourage agribusiness, leading to a widespread increase in food prices.
Valadares emphasized that LCAs are fundamental for agribusiness financing, a sector that he describes as the “locomotive of the country”. The deputy warned that more than 40% of the crop plan comes from these letters of credit, and their taxation can result in more expensive and less accessible credit for producers.
In addition, the parliamentarian pointed out that the measure will also negatively affect the real estate market, which already faces slowdown in various regions of the country. He argues that instead of increasing taxes, the government should focus on administrative reforms and reduction of public spending.
As an alternative to taxation, Valadares suggests that the government should prioritize administrative reform, reduce the size of the public machine and seek greater spending efficiency. He also mentioned the possibility of reevaluating tax incentives in less productive sectors.
The deputy warned of the risk of investor escape from Argentina, who recently attracted significant investments after implementing orthodox spending cutting and legal certainty for investors.
Valadares concluded by emphasizing the importance of facilitating the business environment in Brazil, criticizing what he sees as a tendency for the current government to increase taxes rather than facing structural problems of the economy.
