Contributor - South America

Richard Pedicini

A broad coalition of aviation interests has issued a manifesto opposing the proposed loss of a 30-year exemption from Brazilian import duties and several other VAT-type assessments, which would raise the industry’s tax burden by an estimated $955 million. A legislative committee added the change to a broad tax reform bill promised during the presidential campaign. The taxes would apply to imports and sales in the domestic market for&nbsp;aircraft, spare parts, and maintenance services, and for import duties. Sixty percent of the cost would fall on airlines and cargo carriers, and the rest on general and agricultural aviation.

 


The manifesto argues that the moment is inopportune, given the severe effect of the pandemic on aviation, which suffered&nbsp;a 60 percent drop in revenue in Brazil. International passenger service remains below 20 percent of pre-pandemic levels and analysts don’t expect a full recovery until 2023. The current unfavorable exchange rate of the Brazilian real represents an additional strain for an industry that calculates 50 percent of its costs in dollars.

 


While the associations say they support the idea of a broad reform of the country’s dizzying array of overlapping taxes, the bill’s reduction of corporate profit taxes won’t compensate for the loss of the exemption.

 


The industry’s low margins mean the corporate tax cut wouldn’t be an effective trade-off even in good times. “Civil aviation is characterized by transferring its efficiencies to the user,” said Latin American and Caribbean Air Transport Association (ALTA) CEO Ricardo Botelho. “Therefore, the additional costs, and especially the costs that do not follow global parameters, go against this effort of encouraging aviation.” For example, increased costs to agricultural aviation might result in higher food prices.

 


The manifesto concludes by recalling how both airlines and general aviation helped transport medical supplies, personnel, and patients at the height of the pandemic.

 


Along with ALTA, the Board of Representatives of International Airlines in Brazil (JURCAIB), the Brazilian General Aviation Association (ABAG), the Brazilian Association of Air Companies (ABEAR), the Brazilian Association of Auxiliary Air Transport Services (ABESATA), the National Union of Air Companies (SNEA), the National Union of Air Taxi Companies (SNETA), and the National Union of Agricultural Aviation Companies (SINDAG) endorsed the manifesto.

News about commercial airlines, including regulations, aircraft orders, safety, acquisitions, and mergers.

Aviation Coalition Protests Brazilian Tax Proposal

The loss of a 30-year tax exemption from Brazilian import duties and other taxes would increase airlines’ tax burden by $955 million.

2024 Corporate Aviation Leadership Summit

Charles Alcock

News and developments about airplanes, helicopters and unmanned air vehicles used in all varieties of operations, including airlines, military, business, commercial, general aviation and private.

News about environmental issues relating to aircraft operations, including noise issues, emissisions, and regulations. See Fuel for biofuel.

News and issues relating to international air transport and cargo carriers, national airlines and regional airlines, including aircraft, engines, personnel, acquisitions, accidents, safety, security and training.

Agreement between start-ups could lead to orders for up to 15 aircraft

Skyhop Plans Island Routes With Noemi's Electric Seaplane

Howard Hardee

Airline plans to gradually replace its Embraer E-Jet fleet

A220’s Performance Drives BermudAir’s Fleet Growth

Partners say eVTOLs could accelerate response times in crowded Indian cities

Air India Backs SkyDrive Emergency Medical eVTOL Plans

News and issues relating to the aerospace industry that are related to the science, engineering and business of flight in space involving civil, industrial and military applications, and similar topics related to flight in the atmosphere of the Earth that are not covered more directly by other AINonline subject channels. In other words, both astronautical and aeronautical subjects, except for those aeronautical topics that are specifically covered elsewhere on this website.

Rival Boeing arguably claimed bragging rights at the Farnborough International show

Airbus Balances Shareholder Returns and New Aircraft

New developments at airports including regulations and noise issues; legal disputes; openings, acquisitions and mergers.

Connections to London Heathrow and Manchester airports will start first

Virgin Firms Up eVTOL Air Taxi Alliance with Joby

News and developments about everything that goes into the cabin of an aircraft, from floor coverings to headliners, with a special emphasis on in-flight entertainment, communications and other electronics for passengers. If it is in the cabin of an aircraft, it’s covered here.

More In Airlines

Skyhop Plans Island Routes With Noemi's Electric Seaplane

Agreement between start-ups could lead to orders for up to 15 aircraft

A220’s Performance Drives BermudAir’s Fleet Growth

Airline plans to gradually replace its Embraer E-Jet fleet

Air India Backs SkyDrive Emergency Medical eVTOL Plans

Partners say eVTOLs could accelerate response times in crowded Indian cities

Airbus Balances Shareholder Returns and New Aircraft

Rival Boeing arguably claimed bragging rights at the Farnborough International show

Virgin Firms Up eVTOL Air Taxi Alliance with Joby

Connections to London Heathrow and Manchester airports will start first

ATR Chases New Regional Markets for Twin Turboprops

Iran war and wider geopolitical pressure stall buying decisions

Embraer Racks Up E-Jet Orders at Farnborough

30 firm orders led by Abra

Gulf Air May Buy JetZero’s Blended-wing-body Z4

Japan Airlines also expresses interest at Farnborough Airshow

AIN Products

SUBSCRIPTIONS

RESOURCES

ABOUT AIN