The taxing of beverages sector has gone through transformations over the last few years. Until 2008, the model applied was ad rem, which is based on a fixed value on production, extremely harmful to small manufacturers. In 2009, the model became a combination of ad rem and ad valorem, which was already an evolution, but not very satisfactory. Ad valorem is a progressive model and brings proportionality of taxing over the price.
Since January 2015, when Law 13.097 was sanctioned, ad valorem is exclusively in force.
Since its creation, Afrebras has been fighting for tax equity for the beverage sector, based on discussions that can guarantee a fairer market for the competition. Taxation of the sector is one of the main points that generate competitive distortions between large and small companies.
Proportionally, small and medium industries pay less taxes than multinationals in the industry. See the IPI case:
Tax exemptions and reductions offered by the Manaus Free Trade Zone have been used by multinationals in the soft drinks sector to generate billions on tax credits that affect the tax collection of states and cities throughout the country.
By benefiting from the incentives of the Manaus Industrial Complex, the factories that produce beverages concentrate (soft drinks, teas and energy raw materials) became tax credit factories based on anti-competitive super-billing practices.
The price of the concentrate produced by the multinationals reaches R$ 415.68/kg, up to 20 times higher than the concentrate produced in other states. From this overbilling, multinationals generate billionaire credits that reduce the tax burden of these companies’ subsidiaries throughout Brazil.
These credits are used throughout the product portfolio of these companies. Indirectly, the tax credits generated in the production of soft drinks reduce the tax collection of alcoholic beverages.
This tax distortion generates an impact of up to R$ 9.1 billion per year in public safes. Understand better how the generation of credits for the beverage concentrates of the Industrial Pole of Manaus has affected the Brazilian beverage market reading our book Behind the label.