A study carried out by economists Arnoldo de Campos and Edna Carmelio, in partnership with the Brazilian Institute of Consumer Defense (Idec) and ACT Health Promotion, identified a series of distortions in taxes levied on the Brazilian basic food basket. The research involved both federal and state taxes.
The study analyzed the Tax on Circulation of Goods and Services (ICMS) of the Federal District, Paraná, São Paulo, Bahia and Amazonas and, at the federal level, the Tax on Industrialized Products (IPI), in addition to PIS taxation /Cofins (Social Integration and Contribution Program for Social Security Financing).
“The states have an umbrella rule that comes from the National Council for Finance Policy (Confaz), which has two main specific agreements on basic food baskets,” he told the Brazil Agency the economist Arnoldo de Campos. “These are general rules that authorize states and municipalities to exempt or reduce tax rates [de itens] of the basic basket.”
Confaz establishes general guidelines, but each state, when it adheres to the agreement, makes a list and defines what goes into the tax exemption and reduction. According to Campos, the majority is of interest to the basic food basket. “But there are also ultra-processed foods. In some states, you can find canned meat, sausage, instant noodles and dairy drink that, not necessarily, should be enjoying tax benefits.”
Restrictions
Arnoldo de Campos argued that, often, products that are important for people with dietary restrictions, such as oat flour or rice flour, for those with wheat intolerance, have higher rates and are considered “rich foods”. The economist regretted that biodiversity products, which are regional foods, are not part of the basic food basket. “There are several types of distortions: it is beneficial for ramen noodles and not for this type of food, which, for many people, is basic.”
The study found differences mainly in the list of products and rates. Amazonas adhered to one of the agreements that include tax reduction. “But it is the smallest reduction. The Amazon today has the highest tax burden on top of the basic food basket”, say the economists. Some items, if they come from other states where there is no local production, such as beans, fall under a general rule of higher rates. Other states, such as Paraná, are already testing some items in the basic food basket, such as oat flour. “There is a little more concern about diversifying and expanding the list.”
In São Paulo, the ICMS regulation grants tax exemption for products such as margarine and vegetable cream, hams, biscuits and crackers, in addition to sausages, sausages and bologna, as they are considered “essential”, according to Brazilian legislation.
Arnoldo de Campos suggests changes to the basic food basket, updating the foods that make it up, because “it has little guidance and gives the state a lot of freedom to apply it as it wishes”. The idea is to have a basket that maintains the issue of basic and healthy food and includes produce in naturaor minimally processed, which today have a separate agreement, in addition to regional biodiversity products, with more variations so that they can also be included.
In addition, economists propose that the tax reform that is under discussion have a specific rate category for the basic food basket. “The basic basket has to have a differentiated tax treatment”, stated Arnoldo de Campos.
health damage
Nutritionist Janine Giuberti Coutinho, coordinator of Idec’s Healthy and Sustainable Food program, pointed out that the gradual incorporation of ultra-processed products into the basic food basket over the years has harmed the health of the Brazilian population. Scientific studies associate the intake of these products with the development of non-communicable chronic diseases, such as cancer, diabetes, hypertension and cardiovascular problems. In recent research, the Oswaldo Cruz Foundation (Fiocruz) says that the consumption of ultra-processed foods is directly related to 57,000 Brazilian deaths per year. “Premature deaths”, emphasized Janine, in an interview with Brazil Agency.
According to Janine, the problem was taken to the transitional government and is now being discussed with the Minister of Social Development, Wellington Dias. “We are in conversation with the Secretariat for Food and Nutritional Security to propose a new basic basket, removing ultra-processed items from the list of basic foods accessible to the Brazilian population.”
For the economist, the matter also needs to be articulated with the Ministry of Health. Idec and ACT Health Promotion intend to bring the issue up for discussion in the national councils for Food and Nutritional Security (Consea) and of Health (CNS) and the Interministerial Chamber of Food and Nutritional Security, which is part of the National System of Food and Nutritional Security.
Brazilian society needs to know that there are distortions in the basic food basket and that there are tax exemptions on products that are harmful to health, said Janine. “It is necessary to bring this information to Brazilian society and the discussion to important forums so that the basic food basket policy is aligned with healthy eating and serves as the basis for the Food Guide for the Brazilian Population”.
Janine stated that it makes no sense to have tax exemption for products in which there is evidence of a health risk. With the new rule, the idea is that in natura or minimally processed products are the flagship of items considered essential in the Brazilian diet.
