Minas Gerais is aiming to boost its recycling industry by eliminating taxes on the purchase and sale of waste destined for recycling within the state. The special tax regime, approved by the Tax Policy Commission of the State Department of Finance, is designed to encourage industries that transform scrap into final products.
The state government hopes that this measure will encourage the entire recycling chain to operate within Minas Gerais, from collection to the transformation of scrap materials. By keeping the value-added process within the state, the government aims to benefit both the industry and the associations of waste pickers.
However, some industries that rely on scrap as raw material, particularly in the metal sector, are concerned about the scarcity of this material in the state. According to Vanessa Filardi, Director of Investment Analysis at the State Department of Finance, scrap is being transported from Minas Gerais to other states without undergoing any transformation process.
“It is important for the sector that the entire chain, from waste pickers to intermediaries involved in processes such as washing and pressing, to the recyclers who transform scrap into new products, be consolidated within the state,” explains Filardi.
Under the new special regime, there will be no collection of the Tax on Circulation of Goods and Services (ICMS) on internal and interstate operations involving the purchase and sale of scrap materials for industrialization. In Minas Gerais, waste pickers and their associations were already exempt from paying this tax when trading scraps and trims.
“We intend to attract scrap processing industries, companies that actually carry out the final recycling process,” emphasizes Filardi.
According to the State Department of Environment and Sustainable Development (Semad), registered associations and cooperatives in Minas Gerais have recovered over 420,000 tons of recyclable materials from 2012 to 2023.
In 2023 alone, Minas Gerais prevented 25,000 tons of paper/cardboard, 9,900 tons of plastic, 9,000 tons of glass, and 3,000 tons of metal from ending up in landfills.
To benefit from the special tax regime, interested taxpayers in the sector must request it through the Integrated System for State Revenue Administration.
This initiative is part of Minas Gerais’ efforts to promote sustainability and create a circular economy. By supporting the recycling industry and reducing waste, the state aims to contribute to environmental preservation and economic development.
