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Brazil Promises to Boost Software Sales by 500%. Some Are Skeptical

Brazilian software Brazil's software sector should rise its exports from US$ 100 million to US$ 500 million and job creation should grow 20% with the measures announced by the Brazilian federal government as part of the policy for the software industry.

The estimate was made by André Fonseca, president at one of the five leading companies in the sector, Virtua, headquartered in the southeastern Brazilian city of São Paulo.

The businessman compared the incentives created by the new industrial policy for exporters to the Bolsa Famí­lia (Family Voucher) program of the federal government, as they are going to reward those who manage to meet the goal set by the program.

"I believe the government to be acting correctly, because rewards will be granted to whoever is generating results," claims Fonseca.

By the new industrial policy, the software and technology sector will benefit from a reduction in employers' contribution to social security relative to the payroll, down from 20% to a minimum of 10%, and of the contribution to System S (Sistema S – a set of eleven organisations turned to workers education, health and leisure) down to a minimum of zero, according to the share of exports in companies' revenues.

There should also be twice as much deduction when determining the basis for calculating the Income Tax and the Social Contribution on Net Profit (CSLL) for expenditures on accelerated personnel training programs.

The software export sector may also benefit from the permission for computing and automation companies to deduct, from the basis for calculation of the Income Tax and the CSLL, expenditure on research and development multiplied by a factor of up to 1.8.

The government also announced investment of 1 billion reais (US$ 597.2 million) until 2010 in the computing sector (new program for the Development of the Software and Information Technology Services Industry – Prosoft).

André Fonseca states that those measures are really going to boost software exports, but that the important thing is to wait and see how the measures are going to be implemented. This, according to him, is the prevailing sentiment in the sector, from what he heard in conversations with other entrepreneurs.

"The thing is, the measures cannot take too long to be implemented as a consequence of bureaucratic obstacles, otherwise they will all just remain on paper," asserts the president at Virtua.

ABr

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  • Show Comments (3)

  • João da Silva

    [quote]”The thing is, the measures cannot take too long to be implemented as a consequence of bureaucratic obstacles, otherwise they will all just remain on paper,” asserts the president at Virtua. [/quote]

    AndrÀƒ© Fonseca hit the nail right on the spot. I tend to share his opinion and am afraid that “the measures will just remain on paper”.

    [quote]There should also be twice as much deduction when determining the basis for calculating the Income Tax and the Social Contribution on Net Profit (CSLL) for expenditures on accelerated personnel training programs.[/quote]

    From what I read from the newspapers, the companies who export the IT products will pay only half of the “encargos Sociais” for the employees WHO are directly involved in developing projects for the external market. For those who are dedicated to the domestic market, the contributions are the same as they are now. My question: How is the government going to distinguish between the ones exclusively dedicated to the exports and the others for the domestic market?

    It is all nebulous to me right now and I hope to get some more info in the next few days.

  • swiss a.s.s

    Hey Ch.c
    He is a trivia question for you. Do you know what “Manteiga” means in portuguese? It means “butter” that’s right, hes going to lubricate your a.s.s. with it and let everybody take a shot at it (Economically speaking, “of course”). And, just because I like you, he is another visual for you, Butter balls in your mother’s chin!!!
    Respectuflly yours
    😉

  • ch.c.

    The only problem is……..
    ….that NO ONE, not even the idiot Mantega, specified if it will be in 5, 10 or 20 years !!!!!!!!!!!!

    Ohhhhh….and is US$ 500 millions….A LOT ????? Especially coming from the WORLD MOST EDUCATED PEOPLE ?????

    Whoaaaaaaa !! 😉 😀 😉

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