Brazil tax reductions: A movement to the leadership

Published by Surya Mendonça m2m General, Transport, Smart Cities

Brazilians can feel the leadership, even more, now. Certainly, Neymar has not raised the sixth world cup for the national squad yet, but for some industries, key policies are as important as a trophy. Such is the case of the new regulatory decree, which will significantly reduce the tax to all the machine-to-machine (M2M) devices.

The initiative cuts the installation inspection fee TFI from 26.8 reais (12.2 dollars) to 5.68 reais. The operation inspection fee (TFF), charged to carriers annually for each active chip, will experience also a reduction to 1.89 reais from the current 8.94 reais. All these significant cuts apply specifically to M2M terminals.

It is evident this will have a very positive impact in the industry. GSMA applauded the decision and Paulo Bernardo, the communications minister, has estimated that the number of M2M devices will increase from 17.5mn to 23.3mn, up 33% by 2016.

As different Telefonica communication channels have been showcasing, M2M devices can be applied in a wide variety of fields, sectors and industries, from energy efficiency to Bee farming.

In this case, Brazil leads the ‘race’ in Latin America on Smart Cities -Brazil has 9 cities in the Cities in Motion index 2014; Rio de Janeiro won the World Smart City Award 2013-, but it certainly has the potential to be the reference in any other technological sector or solution.

To accomplish such an ambitious and strategic objective, private sector investments, e.g. Vivo’s and its partnership with Sascar (vehicle monitoring leader), are essential, however big initiatives from the public sector are maybe as equal as important.

This taxes reduction in the M2M industry; represents a very positive turn of the Brazilian public sector, allowing to position the country even closer to the Third industrial revolution and reinforcing at the same time its leadership in LATAM.

Surya Mendonça
Telefonica Global M2M Director

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