Brazilian Senate approves tax exemption for IoT devices

It is expected the measures will be enforced in January 2021.

The Brazilian Senate has approved tax exemptions for connected telecommunications equipment used in the context of the Internet of Things (IoT).

According to the bill, which now needs to be signed into law, the tax exemption for the IoT devices would be valid for five years. The devices would also be exempt from prior licensing from the Brazilian Telecommunications Agency (Anatel) and this has already been incorporated into the agency's norms.

The bill foresees the measures to become effective from January 1, 2021. The tax exemption already has government support and is foreseen in the 2021 Budget.

Brazil's National IoT Plan was announced as one of the pillars of the country's Digital Transformation Strategy, which was created in March 2018. The IoT strategy, delivered in June 2019, provides a mechanism for strengthening the national innovation ecosystem and development of IoT.

The four core verticals of Brazil's IoT plan are Smart Cities, Healthcare, Agribusiness and Manufacturing. The plan was preceded by a study, funded by Brazil's National Development Bank (BNDES) and carried out by a consortium led by consulting firm McKinsey.

The market for applications and hardware based on the IoT approach is set to generate $3,29 billion in Brazil by 2021, according to a study by consulting firm Frost and Sullivan.

According to Frost, the Brazilian IoT market should be driven mostly by the automotive and manufacturing industries, though "significant opportunities" also lie within segments such as smart cities, utilities, agriculture and healthcare.