Provisional Measure 1541 allowing the federal government to give financial support to state governments willing to privatize state banks or to liquidate or transform them into non-financing institutions was enacted on September 5 1996. The programme will be funded by a federal government bond issue, but the public debt is expected to fall after the privatization of state assets.
Law 9295/96 allows the granting of mobile phone or satellite concessions to companies in the private sector. For an initial period up to July 21 1999, the government can limit the concessions to companies at least 51% of whose voting capital is directly or indirectly held by Brazilian citizens. Thereafter there will be no restrictions on foreign capital.
Exemption from sales tax
On September 13 1996 the Brazilian president formally authorized Complementary Law 87 removing sales tax (ICMS) from certain materials for production and some goods earmarked for export. The current rate of ICMS is around 15%. It is hoped the new law will boost exports and manufacturing investment.
Eliana Maria Filippozzi