Brazil greenlights tax benefit for industrial equipment renewal

The Brazilian government gave the definitive approval to a tax benefit for the purchase of machinery and equipment in 23 industrial areas.

The approval, published in the official gazette, came after congress passed a bill on the matter. 

The government said the measure will have an impact of 3.4bn reais (US$607mn) on tax collection, half this year and the rest in 2025.

The benefit is in the form of accelerated depreciation for machinery and equipment purchases.

According to the government, the measure is likely to trigger investments in new equipment of 20bn reais.

"In addition to modernizing factories, the measure can contribute to increasing companies' cash flow and gross fixed capital formation – which measures future production capacity with the acquisition of machinery," the federal government said in a statement.