Bolsonaro sanctions law that creates credit stimulus program for businesses

President Jair Bolsonaro on Thursday (2) sanctioned the law establishing the Credit Incentive Program (PEC). Photo: Alan Santos / RP / Archives

President Jair Bolsonaro sanctioned this Thursday (2) the law establishing the Credit Incentive Program (PEC). The project, approved by Congress, proposes to encourage credit to individual microentrepreneurs, micro and small enterprises, rural producers, cooperatives and fishing and seafood associations, with an annual gross income of up to 4, 8 million reais.

The Credit Incentive Program (PEC) encourages financial institutions to provide loans, at their own risk, to the program’s target audience. In exchange, the government allows that in the event of loss, bankruptcy or extrajudicial liquidation, part of the tax credits for temporary differences can be converted into a deemed credit within the limit of the transactions granted. The limit for contracting credit operations is until December 31, 2021. The use of these amounts as deemed credit can be done until December 31, 2026.

“The sanction of the project which institutes the credit incentive program represents a fundamental action for the maintenance of employment and the development of general credit in the Brazilian economy, because it encourages banks to lend resources to entrepreneurs and develop credit for small and medium-sized enterprises, in order to try to alleviate the economic crisis resulting from the pandemic ”, indicates a note from the General Secretariat of the Presidency.

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