Dilma Rousseff arrives in crisis-hit Europe this week for her first visit as Brazilian president with plans to offer tax breaks for investors in the country’s telecommunications industry and a new air transport agreement.
Under the proposals, Brazil is seeking to attract about R$70bn ($37.2bn) in investment to develop its broadband networks and will offer European airlines greater access to Brazilian skies ahead of the World Cup and Olympic Games in 2014 and 2016.
“In the next few days, Dilma will present interim measures to eliminate taxes on the construction of communications networks,” Paulo Bernardo, communications minister, told the Financial Times. “In our estimation …in the next five years, there will be investments of the order of R$70bn in the construction of telecommunications networks.”
Known for its bureaucracy and high taxes, any plans to remove barriers to investment in Brazil will be greeted with enthusiasm by European companies, which are among the biggest investors in Latin America’s largest economy.
Europe is one of Brazil’s most important trading partners, accounting for 19.4 per cent of the South American country’s exports and 18.5 per cent of its exports.
European companies, including Portugal Telecom, Telecom Italia and Telefónica of Spain are among the biggest telecom operators in the country while automotive companies such as Volkswagen and Fiat are among the dominant producers of cars.
Carlos Ghosn, chief executive of French-Japanese automaker Renault-Nissan, on Friday said the company plans to set up a new plant in Brazil and expand an existing one as the market grows in importance.
Ms Rousseff is planning to spend nearly a week in Europe, during which she will visit Brussels for meetings with European officials and a business conference, travel to Bulgaria, where her father was born, and then Turkey.
Mr Bernardo, considered one of the president’s inner circle, said Brazil wanted to expand the number of households with internet access over the next four years from 17m to 40m.
This would result in 60 per cent of the population having internet access by 2014. He did not disclose the value of the expected tax breaks but Reuters reported that these would amount to about R$6bn over five years.
On airlines, Ms Rousseff is expected to sign a new air transport agreement with the European Union that will extend existing agreements to a further 12 countries or a total of 27.
The agreement will expand flight frequencies by 10 per cent a year, excluding São Paulo – whose airport is already at full capacity – with full liberalisation occurring after 36 months.
Europe is Brazil’s second-most import market for air passenger traffic after Latin America, with volumes rising 6.5 per cent a year over the past decade to 4.9m arrivals in 2010.
Ms Rousseff and her ministers will also face difficult questions during their visit to Europe over issues such as a Brazilian proposal to raise taxes on imported cars and differences with Fifa, the governing body of world soccer, over the 2014 World Cup.
Ms Rousseff is expected to meet Fifa to discuss the problems, which, aside from Brazil’s delays in preparations for the games, include differences over ticket prices and television rights, local media have reported.
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