Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: hlpinout who wrote (87793)	12/12/2000 7:00:58 PM
From: hlpinout	Respond to of 97611

Brazil Tax-Break End Seen Lifting Prices Updated: Friday, December 8, 2000 04:20 PM ET Email this article to a friend! Printer-friendly version The court order, announced Wednesday night, suspends tax breaks granted to producers of computing and telecommunications products as an incentive to bring the latest technology and know-how to Brazil. "If the ruling goes into effect, we will have no option but to pass on the extra costs to the consumer," Carlos Salgado, head of corporate business for Compaq Brazil, said. He said Compaq prices could rise across the board by about 20%. "There will be an automatic and drastic drop in demand and a rise in prices," Salgado said. Ericsson said the price of its mobile phones could increase by a similar amount, according to business daily Valor Economico. Other computing and telecom producers operating in Brazil outside the Manaus Free Trade Zone would likely follow suit, media reports said. The ruling could also translate into a $2 billion bill in back tax payments for the industry, business daily Gazeta Mercantil reported. Brazil's $560 billion economy is Latin America's largest and accounts for about half of South America's output. The tax breaks for technology companies outside the Manaus zone originate in old information technology legislation that has been extended on a temporary basis pending a new IT law currently being debated. Technology firms, including Compaq, Ericsson, Motorola and Lucent, have set up shop outside the Manaus zone, investing billions of dollars. The electronic goods sector grew 21% this year, with turn over rising to 50 billion reals ($1=BRR1.968). "We still believe a way out will be found," said Salgado. "We want to believe that this is circumstantial and that there will be no rupture in the government's industrial policy." (Corrected 04:54 PM)