
Associates Blog

ESG and Taxation in the Manaus Free Trade Zone: Strategies for Sustainable Tax Management
25 de dez de 2024
2 min read
By Yonna Benshalom and Ninfe Dantas, Tax Partners

The fiscal agenda has been a central topic recently, particularly with the imminent changes brought by the Tax Reform. In this context, the tax incentives of the Manaus Free Trade Zone (ZFM), aligned with ESG (Environmental, Social, and Governance) policies, have gained prominence.
These policies represent a set of best business practices addressing environmental issues (extrafiscal policies to increase taxation on polluting items and services, incentives for clean energy generation and consumption), social aspects (socially oriented tax and social security benefits, tax ethics, fiscal narrative, and “fair share of taxes”), and governance (strategic fiscal planning, tax risk matrices, and fiscal transparency reporting). They serve as strong indicators of how companies balance taxation with the common good.
The impacts of ESG policies are evident both in internal management and in external operations within the financial market, directly influencing benchmarking strategies of business groups in the Manaus Free Trade Zone. The sustainable economy, being a cornerstone of this region, attracts significant national and international investments.
The implementation of ESG policies by businesses in the Manaus Free Trade Zone aims to engage various stakeholders, including professionals, consumers, shareholders, suppliers, and the local community, who increasingly demand transparency in information on the subject.
Key ESG Strategies for the Manaus Free Trade Zone
Outlined below are some strategies adopted by businesses to demonstrate effective ESG application within the Manaus Free Trade Zone:
1. Analysis of the tax reform and its implications for business activities and ESG initiatives.
2. Identification of PIS/COFINS credits related to ESG-related expenses.
3. Evaluation of innovations for decarbonization eligible under the Innovation Tax Incentive Law (Lei do Bem, Law No. 11,196/2005).
4. Review of fiscal compliance and tax record management.
5. Preparation of fiscal transparency reports and tax policy documentation.
6. Utilization of the Authorized Economic Operator (AEO) framework (IN RFB No. 2,154/23).
7. Analysis of the fiscal aspects of carbon credits.
8. Fiscal maturity assessment, highlighting existing policies and identifying areas for improvement.
Conclusion
By integrating ESG strategies with tax management, businesses in the Manaus Free Trade Zone can strengthen their position as leaders in sustainable economic practices. These initiatives not only foster transparency and compliance but also enhance their appeal to investors and stakeholders committed to ethical and environmentally responsible practices.