Senators approved the incentives, worth 3.3 billion real ($1.5 billion) a year, and the lower house must vote on them by tomorrow to make them permanent.
The measure eliminates all taxes on exports for makers of pharmaceuticals, machinery, semiconductors and software that ship four of every five of their products abroad. To win the passage of the bill, known as MP-255, the government extended the deadline to renegotiate city debts with the federal government to 240 months from 60 months currently.
In addition, the northern state of Amapa and as many as four municipalities in northern Para state were given the status of free-trade manufacturing zones, making them equal to Manaus, the capital city of Amazonas state. With that designation, makers of technology products based in those regions are exempted from paying taxes on manufacturing.
The bill should help reduce the cost of new factory investments by about 11 percent and secure as much as $20 billion of export-oriented investment by the end of 2006, Industry and Trade Minister Luiz Fernando Furlan said in April.