Economic implications of the taxation of agribusiness exports in the Brazilian Midwest

Abstract: The government often proposes an increase tax toward a dynamic sector in an event of a budget deficit. This was the case for central west states governments in Brazil during the last crisis, wherein a tax raising on the exports of grains, oilseeds and processed food was considered. We assessed this scenario by a general equilibrium model and we found that the proposed tax raising would present a widespread negative effect in the mid-western economy related to a welfare, trade-flow and Gross Domestic Product (PIB). The greater impacts were seen in the grain, oilseeds and processed food sectors.

Keywords:
economic aggregates; general equilibrium; processed food and grains