Brazil to cut tariffs on capital, technology goods in April where there is no domestic output

Brazil's government will automatically cut import tariffs in April on capital and technology goods affected by a duty hike earlier this year if companies claim there is no domestic production by the end of this month, a senior official said.

"This initial process is automatic. A company that submits a request and argues there is no national production will receive the reduction immediately," said Uallace Moreira, industrial development secretary at the Development, Industry and Trade Ministry.

CONTEXT

* Companies have until March 31 to submit requests for thetariff reduction, which will last four months under a scheduleset when the government raised import duties on more than 1,200capital and technology goods in early February. * The tariff may be reinstated if technical reviews show therequest is not justified, Moreira said. * The government said at the time the tariff increase aimedto address a recurring sectoral trade deficit and high importpenetration that was discouraging domestic industry in LatinAmerica's largest economy. * The increase, which public finance experts estimated couldraise government revenues by up to 20 billion reais ($3.8billion) this year, triggered a strong backlash from affectedsectors. * Within a month the government had partially reversed themeasure, restoring zero tariffs on items that had been taxedafter losing exemptions granted under a policy to attract datacenters to Brazil. * Other goods that had prompted complaints from affectedsectors also returned to zero tariffs last month, includingtextile machinery, medical equipment and truck-mounted cranes.

($1 = 5.2032 reais)

(Reporting by Bernardo Caram; Writing by Marcela Ayres; Editing by Hugh Lawson)