Covid-19 Factsheet Brazil - Rubix
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Covid-19 Factsheet Brazil Copyright © 2020 Rubix. All rights reserved.
COVID-19 Factsheet
Brazil
Country Specifications
Elements Details
Country Brazil
No, a nationwide lockdown has not been instated in
Whether the country is/was
Brazil. Only a few cities have set lockdowns—most of
under Lockdown (LD)?
which are being eased with fewer restrictions.
São Paulo:
● Start date: March 24th, 2020
● Restrictions are being eased but the
lockdown has not been completely lifted
Rio de Janeiro:
● Start date: May 13th, 2020
● The lockdown has been announced in some
neighbourhoods in the city
Maranhao:
● The state’s capital, Sao Luis, has instated a
complete lockdown
● Start date: May 6th, 2020
● End date: May 20th, 2020
Period of LD
Ceara:
● Fortaleza, a city in the Ceara state has entered a
lockdown
● Start date: May 8th, 2020
● End date: May 28th, 2020
Pará:
● Start date: May 7th, 2020
● End date: May 25th, 2020
Most states and municipalities in Brazil have not
entered lockdown and have imposed some restrictions.
(Paraguassu 2020) (Reeves 2020)
Page 1 of 11
Government Intervention
Elements Details
● Schools and public spaces remain closed in
most cities until further notice
● Non-essential services like restaurants, sports,
and events have been prohibited
Restrictions Imposed in the ● In some states that are under complete
Country lockdown, people are forbidden to go outside
except to obtain groceries, medication, or
cleaning supplies
● Most governors and mayors have not imposed
mandatory stay-at-home orders for citizens
Customs Measures:
Duty Relief
● The Tax on Industrialised Products (IPI) will be
temporarily reduced
● The rate of the Import Tax will be temporarily
reduced to 0%
Customs clearance:
● The customs clearance of imported goods will
be simplified and accelerated to maintain a fast
flow of goods, commodities, and raw materials,
and speed up the delivery of cargos
Employment-related measures:
● To help companies and preserve jobs, the
Federal Government published a Provisional
Measure (MP) that modifies certain labour
regulations during the pandemic. This includes:
Support extended to the ○ Adoption of telecommuting
Industries at risk by ○ Use and anticipation of holidays
Government ○ Special hours compensation scheme
○ Suspension of administrative
requirements for safety and health at
work
● A bill that provides emergency aid of R$ 600
(116 USD) to informal works and R$ 1,200 (232
USD) to single mothers
● The proportion of working hours to wages has
been reduced
Page 2 of 11
Economic stimulus measures:
● Caixa Econômica Federal (CEF)—a state-
owned Federal Savings Bank—will provide 14.9
billion USD in credit lines to SMEs
● The CEF has also cut interest rates on some
types of credit and has offered clients a grace
period of 60 days
● The Banco do Brasil announced a 20 billion
USD increase in its credit lines
● The BNDES is opening a working capital loan
line for small and medium-sized firms of the
tourism and service sector
● The Conservation Capital Buffer (CCB) will be
reduced from 2.5% to 1.25% for 1 year
● The government presented a plan of R$ 88.2
billion for states and municipalities, including:
○ Transfer of US$1.5 billion to health
expenses
○ Transfer of US$387 million to social
assistance expenses US$7.7 billion for
loan facilitation operations
○ US$2.4 billion for the suspension of the
debts of the states to the Union
● Funds from the National Bank for Social
Support extended to the Development (BNDES) will be provided to SMEs
Industries at risk by with financial service technology companies
Government (continued) ● The Brazilian Federal Government has
announced an emergency credit line for SMEs to
finance salaries for a period of two months
● A relief plan of R$10 billion (2 billion USD) will
be used to support SMEs with yearly revenues
up to R$360,000/year (72,000 USD/year)
● Support for airlines: The BNDES has proposed a
system that involves convertible debentures and
can contribute to the capital to these companies
through the purchase of shares
● Support of the healthcare industry: The BNDES
has created a new credit line for healthcare and
life science manufacturers to produce 15,000
ventilators, 5,000 health monitors, 80 million
medical masks, and 3,000 new ICU units
● Support for the tourism sector: Public banks
like BNDES and Caixa Econômica Federal
will create new credit lines
● Support for the agricultural sector: A R$500
million (100 million USD) relief plan will be
offered to small agricultural producers and
family-owned farms
● A relief plan of at least R$ 48 billion will be
provided to large companies such as airlines,
energy companies, and large retailers
Page 3 of 11● The CEF and the Brazilian Micro and Small
Business Support Service (Sebrae) announced
a R$7.5 billion (1.5 billion USD) credit line for
micro and small companies and individual
micro-entrepreneurs (MEIs)
● Support for rural producers: They will have
access to a credit line until June 30, 2021 to
finance investments, purchases of machinery
and equipment, and more.
Tax Measures
Federal Tax Measures*:
● 90-day suspension of deadlines and charges
regarding tax debts
● Deadline for filing individual income tax return for
2019 has been extended to June 2020
● Extended period of time given for collecting
federal taxes
Support extended to the State and Local Tax Measures:
Industries at risk by ● São Paulo:
Government (continued) ○ Suspension of some tax deadlines
○ Suspension of tax court procedures for
São Paulo state tax court
● Rio de Janeiro:
○ Suspension of tax filing and other
deadlines
○ 60 day extension of validity periods of
specific certificates
○ State VAT (ICMS) taxable basis
reduction for transactions with hydrated
ethyl alcohol
● Santa Catarina: Postponed the deadline for filing
some state tax returns
● Paraná: Postponed the payment deadline for
small businesses
(Rosa 2020) (Vinicius 2020) (Rezende 2020)
*Other Federal tax measures have been mentioned in
the Changes in Fiscal Policy section
Page 4 of 11Elements Details
● The central bank has cut the interest rate to
3.75%
● Policy rate (SELIC) has been lowered by 125bps
by the central bank
● The central bank has cut long-term reserve
requirements from 25% to 17%—this may be
further reduced in the coming weeks
● Brazil’s central bank plans to inject 1.2 trillion
reais (233.81 billion USD) into the country’s
Change in Monetary Policy financial system to combat the economic effects
of the coronavirus pandemic—more than half of
which comprises of loans to banks
● A facility to provide loans to financial
institutions—supported by private corporate
bonds—has been opened by the central bank
● The central bank has announced measures that
give SMEs up to 2 billion reais in special
long-term bonds
(Ayres 2020) (IMF Editors 2020) (Lima 2020)
To mitigate the economic impact of the pandemic, the
government announced several fiscal measures that
contribute to 10% of the country’s GDP. These
measures include:
● Temporary income support for vulnerable
households—includes cash transfers to informal
and unemployed workers as well as advance
payments of salary bonuses to low-income
workers
● Employment support—partial compensation to
temporarily suspended workers
Change in Fiscal Policy ● Lower taxes and import levies on essential
medical supplies
● Supporting higher health spending with the help
of new transfers from the federal to state
governments
● Expansion of credit lines for businesses and
households—with a focus on supporting working
capital—by public banks
○ Credit lines contribute to over 4% of the
GDP
● 1% of the GDP will be used in credit lines to
SMEs and micro-businesses to help with payroll
costs, working capital, and investment.
(IMF Editors 2020)
● Exchange rate has decreased by 10% since
Exchange Rate and Balance of mid-February
Payments ● The central bank has intervened in the foreign
exchange market through spot and derivative
contract sales, by a total of 46.5 billion USD
(IMF Editors 2020)
Page 5 of 11Elements Details
Health:
● 2,000 new beds have been hired in ICUs
● Tests for Covid-19 are now a mandatory
coverage for health insurance firms
● Telemedicine services—where physicians make
consultations online and issue electronic medical
reports and/or prescriptions—have been funded
and promoted
● Requests to approve measures that allow easier
access to 20% of the Fund resources—to
provide private health insurance companies with
funding—have been requested to the Agency of
Supplementary Health (ANS)
● The Federal government and states are
preparing to distribute 10 million rapid test kits to
hospitals and clinics
● The Industrialised Products Tax—for listed
imported and domestic goods that help combat
Covid-19—have been temporarily exempted
● The BNDES has created a R$ 2 billion credit line
to increase emergency capacity, medical
Measures taken by the
materials, and hospital equipment across Brazil
Government to mitigate Impact
● Government properties will be used as field
of Covid – 19
hospitals—this includes large urban centres
● Alcohol in gel and chloroquine are being
manufactured on an industrial scale by the
laboratories of the Armed Forces
● A fund of R$ 1 billion (200 million USD) will
finance eleven research thematic lines, including
the development of new methods of prevention,
control, diagnosis, treatment, and vaccines
against Covid-19
Trade:
● The government has facilitated the clearance of
imported raw materials
● Zero import taxes for medical products till the
end of the year
● Customs clearance of medical and/or hospital
products will be prioritised
● The export of products necessary to combat
Covid-19—like alcohol gel, antiseptics, masks,
and respirators—will be restricted
(GOMES 2020)
Page 6 of 11Industries Impacted
Elements Details
Port Activities:
● Has been deemed an essential service
● Port workers have a specific emergency
benefit and have been granted flexible
contortions
● Have been granted tariff exemptions
Mining Industry:
● Has been declared an essential activity in
Brazil—operations are allowed to continue
● Although Covid-19 has had a negative impact
on Brazilian production, the mining sector is
expected to bounce back
● Brazil has an increasing demand for iron ore
from China, so production is expected to
continue with workers taking the required
Industries Allowed to Operate
precautions
Food Production:
● While some poultry plants have shut down due
to the pandemic, a large portion of the sector
remains unaffected because of the high
demand of poultry, livestock, fisheries, and
more
Other:
● Life and Health Insurance
● Online commerce
● Pharmaceutical industry
● Medical care
(Nogueira 2020) (Azevedo 2020)
Travel and Tourism Industry:
● Contributes to approximately 9.3% of Brazil’s
GDP
● 80% of all lodging players, parks, and tourist
attractions in Brazil have been closed off
● Tourism in Brazil could lose approximately 6.2
billion USD—without the support of
government aid
● By May, Brazil saw a considerable 91.6%
Industries Severely Affected
decline in air traffic and domestic flights
Automotive Industry:
● Auto production in Brazil has decreased by
99% in April
● Layoffs have been avoided, for the most part,
but production has been suspended
● Exports and sales have had equally drastic
declines—exports to Argentina have dropped
by 77%
Page 7 of 11Oil and Gas Drilling:
● The board of the National Agency of
Petroleum, Natural Gas, and Biofuels (ANP)
has approved a temporary suspension of the
exploration of certain areas and the production
of oil and gas
Other:
● Leisure facilities
Industries Severely Affected
● Casinos and gaming
(continued)
● Construction
● Sports
● Retail
● Realty
● Dental care
(Manzueto 2020) (Touro 2020) (Salado 2020)
(Reuters 2020) (Tayal 2020)
Page 8 of 11Works Cited
Ayres, Marcela. “UPDATE 2-Brazil's Central Bank to Flood Lenders with Fresh Liquidity.”
Reuters, Thomson Reuters, 23 Mar. 2020,
www.reuters.com/article/health-coronavirus-brazil-banks/update-2-brazils-central-ba
nk-to-flood-lenders-with-fresh-liquidity-idUSL1N2BG0IX.
Azevedo, Daniel. “Brazil's Poultry Sector Barely Affected by Covid-19.” PoultryWorld, 20
Apr. 2020,
www.poultryworld.net/Meat/Articles/2020/4/Brazils-poultry-sector-barely-affected-b
y-Covid-19-572682E/.
GOMES, ERIVALDO ALFREDO. “Brazil's Policy Responses to Covid-19.” Minestério Da
Economia, 7 Apr. 2020,
www.gov.br/economia/pt-br/centrais-de-conteudo/publicacoes/publicacoes-em-outros
-idiomas/covid-19/brazil2019s-policy-responses-to-covid-19.
IMF Editors. “Policy Responses to COVID19.” IMF, 2020,
www.imf.org/en/Topics/imf-and-covid19/Policy-Responses-to-COVID-19#B.
Lima, Sergio. “Brazil Eyes 'Unusually Large' Stimulus After Bold Rate Cut.”
BloombergQuint, Bloomberg Quint, 7 May 2020,
www.bloombergquint.com/global-economics/brazil-cuts-key-rate-to-3-with-economy
-headed-to-recession.
Manzueto, Cristiane. “Effects Of COVID-19 On The Brazilian Entertainment And Tourism
Sector - Coronavirus (COVID-19) - Brazil.” Articles on All Regions Including Law,
Accountancy, Management Consultancy Issues, Tauil & Chequer, 28 Apr. 2020,
Page 9 of 11www.mondaq.com/brazil/operational-impacts-and-strategy/924176/effects-of-covid-1
9-on-the-brazilian-entertainment-and-tourism-sector.
Nogueira, Marta. “Brazil Mining Sector Will Quickly Bounce Back after COVID-19
Disruption - Ibram.” Reuters, Thomson Reuters, 19 May 2020,
in.reuters.com/article/brazil-mining/brazil-mining-sector-will-quickly-bounce-back-af
ter-covid-19-disruption-ibram-idINL1N2D11YJ.
Paraguassu, Lisandra. “Major Brazilian Cities Set Lockdowns as Virus Spreads.” Reuters,
Thomson Reuters, 5 May 2020,
www.reuters.com/article/us-health-coronavirus-brazil-lockdown/major-brazilian-citie
s-set-lockdowns-as-virus-spreads-idUSKBN22H2V3.
Reeves, Philip. “As Brazil's COVID-19 Cases Continue To Climb, Some Areas Prepare To
Ease Restrictions.” NPR, NPR, 29 May 2020,
www.npr.org/sections/coronavirus-live-updates/2020/05/29/864736407/as-brazils-co
vid-19-cases-continue-to-climb-some-areas-prepare-to-ease-restricti.
Reuters. “Covid-19 Impact: Mexico, Brazil See 99% Plunge in Auto Production in April.”
Business Standard, Business-Standard, 9 May 2020,
www.business-standard.com/article/international/pandemic-effect-mexico-brazil-see-
99-plunge-in-auto-production-in-april-120050900213_1.html.
Rezende, Gabriel Caldiron, and Ricardo Marletti Debatin da Silveira. “Brazilian Government
Takes Tax Measures to Support the Economy against COVID-19.” International Tax
Review, International Tax Review, 16 Apr. 2020,
www.internationaltaxreview.com/article/b1l71q1gchqyxt/brazilian-government-takes
-tax-measures-to-support-the-economy-against-covid-19.
Rosa, Rodrigo La. “Brazil: Government and Institution Measures in Response to
Page 10 of 11COVID-19.” KPMG, KPMG, 14 Apr. 2020,
home.kpmg/xx/en/home/insights/2020/04/brazil-government-and-institution-measure
s-in-response-to-covid.html.
Salado, Angelica, et al. “The Impact of Coronavirus in Brazil: Uneven Prospects Across
Industries.” Market Research Blog, 14 Apr. 2020,
blog.euromonitor.com/the-impact-of-coronavirus-in-brazil-uneven-prospects-across-i
ndustries/.
Tayal, Manu. “Brazilian Solar Industry Feels the Heat of Both Falling Economy,
COVID-19.” Saur Energy International, 12 May 2020,
www.saurenergy.com/solar-energy-news/brazilian-solar-industry-feels-the-heat-of-bo
th-falling-economy-covid-19.
Touro, Felipe. “The Impact Of COVID-19 In The Hotel Industry – Brazil Overview: By
Felipe Touro.” Hospitality Net, Hospitality Net, 11 May 2020,
www.hospitalitynet.org/opinion/4098598.html.
Vinicius, Marcus. “Brazil: Tax Relief Measures (COVID-19).” KPMG, KPMG, 6 Apr. 2020,
home.kpmg/us/en/home/insights/2020/04/tnf-brazil-tax-relief-measures-covid-19.htm
l.
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