In a move aimed at revitalizing its economy, Brazil's Vice President Geraldo Alckmin revealed government measures on Sunday to provide tax benefits to companies, encouraging them to invest in new machinery and transportation infrastructure. This initiative is part of President Luiz Inacio Lula da Silva's broader plan to "re-industrialize" Latin America's largest economy, where industrial output is still recovering from pre-pandemic levels and remains more than 18% below its 2011 peak.

The Lula administration is committed to spurring industrialization by incentivizing "green" projects, including flex-fuel and electric vehicles, renewable power, and biofuels. Vice President Alckmin outlined the first measure, an executive order establishing the "Mover" program.

This program aims to reduce income taxes for transportation companies, encouraging investment in new technologies, research, and development. The program is projected to provide benefits totaling 3.5 billion reais ($721.34 million) in the coming year, gradually increasing to 4.1 billion in 2028.

Alckmin, who also serves as Lula's minister of Development and Industry, emphasized the program's potential to attract investments to Brazil, addressing the challenges of low investment and productivity. Although an executive order means immediate implementation, the program requires Congressional approval within four months.

President Lula's second measure involves a bill sent to Congress proposing 3.4 billion reais in income tax benefits for companies renewing their machinery, referred to as the "accelerated depreciation project."

Alckmin explained that the goal is to stimulate the renewal of Brazil's industry by expediting the usual 20-year equipment depreciation to a two-year timeline. He hinted at a "second phase" for the program in the future, without providing specific details.

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To offset revenue losses linked to these tax benefits, Alckmin outlined plans to increase import taxes, including those imposed on electric vehicles imported from abroad. This multifaceted approach aims to kickstart economic growth, foster innovation, and position Brazil as a hub for sustainable and modern industrial practices. ($1 = 4.8521 reais)

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