The tax reform currently under consideration in the Federal Senate, PLP 68/2024, could overtax sociobiodiversity products and exacerbate environmental issues in Brazil. This is according to a technical note prepared by the Observatory of Sociobiodiversity Economies (ÓSocioBio), the Socioenvironmental Institute (ISA), and the Society, Population and Nature Institute (ISPN), with the support of 53 organizations. Check it out here.
The study reveals that, if approved as is, the reform will bring significant setbacks, contradicting national public policies and the country's international commitments to combat climate change. The Technical Note also highlights tax inequality, presenting information on subsidies to polluting sectors, such as pesticide production.
Among the main problems raised is the possibility of sociobiodiversity products, such as açaí, Brazil nuts, pequi and macaúba, produced by indigenous peoples, quilombolas and traditional communities, being taxed at the full rate of 27,97%.
Today, for example, the main açaí-producing states have tax rates ranging from 3,65% to 9,25%. With the new Tax Reform rules, these rates could rise to as high as 27,97%, at least tripling and potentially up to seven times higher. This change directly threatens sustainable economies that protect forests and promote biodiversity.
"It's an opportunity to rethink taxation, but the Tax Reform proposal disregards the strategic role of the sociobioeconomy. Products from sociobiodiversity are sources of income for communities and represent the protection of our biomes, promoting biodiversity and providing essential ecosystem services, such as climate regulation and the formation of fertile soils," emphasizes Laura Souza, executive secretary of ÓSocioBio.
ISA economist João Luís Abreu, one of the authors of the Note, explains: “We are suggesting that indigenous peoples, quilombolas, artisanal fishermen, and traditional communities be explicitly included in the tax reform, granting them the benefits guaranteed to rural producers. These are precisely the peoples whose agricultural practices and ways of life are connected to the environment, promoting biodiversity and protecting cultures. This is also a way of recognizing Brazil's food and production diversity."
Tax inequality
The tax reform currently under consideration exposes a profound inequality in tax treatment between sustainable production chains and polluting sectors. If sociobiodiversity products receive tax exemptions, the estimated impact on national revenue is minimal: just 0,046% or R$622 million, according to 2023 data.
This almost symbolic amount contrasts sharply with the R$7,6 billion in tax losses expected from including meat in the basic food basket, a sector responsible for 57% of greenhouse gas emissions in Brazil. While sustainable chains face the risk of severe taxation, highly polluting sectors are largely favored.
Agribusiness, for example, will have a 60% exemption for the use of pesticides, and meat, now tax-exempt, will receive a 100% tax exemption.
Proposals for adapting to the reform
The Technical Note suggests, among other measures, the following adjustments to PLP 68/2024:
1 – Ensure that indigenous peoples, traditional peoples and communities, and family farmers (PIPCTAF) receive the same tax treatment as other rural producers who benefit.
2 – Ensure that products and services originating from the territories of extractivists, artisanal fishermen, indigenous peoples, quilombolas, and traditional communities have the same benefits as other rural producers.
3 – Include products already used as the basis of daily diets in different regions of the country and that make up sociobioeconomy value chains in the national basic food basket or in the list of foods that have 100% exemption, allowing a zero tax rate on their sale and consumption.
4 – Simplify the process of applying for tax exemptions and benefits for small producers and cooperatives and associations of native seeds, family farming and sociobiodiversity products.
Mobilization
ÓSocioBio and its partner organizations are promoting the "Sociobioeconomy in Tax Reform" campaign on social media. The initiative aims to mobilize society to support a fair tax that values biodiversity and promotes tax justice. Follow: @osociobio. Go to: www.osociobio.org.br