São Paulo cuts VAT for recyclables

The Brazilian state of São Paulo has modified regulations governing the ICMS (local business tax) value added tax through last October’s Decree No. 47.278. Transport to or from other states of paper waste or cuttings, metal scrap, glass waste and fragments or residue of plastics, rubber or textiles is now exempt from the ICMS tax.



Brazilian recycling organisation CEMPRE reports that if these recyclable goods weigh less than 200 kg and have been acquired either privately or from street scrap merchants, no invoice need be issued.



“This change in the São Paulo tax is good news, but not enough. In Brazil, the governments that set the rules for the IPI (industrialized product tax)and ICMS taxes need to understand that the recycling sector does not want market protection.”



“We just want an end to the current policy of fiscal disincentives for our business, which is uniquely concerned with giving a product a second life cycle. If the aim is really to increase separated waste collection and give fair treatment to recyclers, then zero rates should be adopted for both the IPI and ICMS taxes, which should apply to outgoing goods rather those incoming,” says Alberto Fabiano Pires, consultant in paper recycling at the Brazilian Paper and Pulp Association (Bracelpa).