Finance
May 04, 2026
Export incentives and productive standard: the role of drawback in Brazil
How a customs regime focused on exports influences the country’s costs, incentives, and productive standard
The Brazilian export agenda has maintained, in recent years, a profile marked by the relevance of commodities and intermediate products. Data from ComexStat, a system of the Secretariat of Foreign Trade (SECEX), linked to the Ministry of Development, Industry, Trade and Services (MDIC), indicate that the manufacturing industry accounted for just over half of exports in 2025, while the extractive industry maintained a participation close to a quarter of the total. These sectors are highly integrated into the international market and sensitive to cost and price variations. This pattern raises a central question for Brazilian economic policy: do tax relief instruments, such as drawback, contribute to productive diversification or reinforce specialization in already consolidated chains?
The customs regime of drawback, established in Brazil by Decree-Law No. 37, of 1966, seeks to avoid the accumulation of taxes on inputs used in the production of exported goods. In this context, the analysis of its role in economic policy passes, above all, through the suspension modality, which concentrates the largest part of the regime’s operations. This modality allows the acquisition of inputs with tax suspension, provided they are linked to export, and therefore offers a more precise cut to understand how the instrument influences costs and incentives in foreign trade.
In practice, taxes such as Import Duty (II), Tax on Industrialized Products (IPI), PIS/Cofins and, in many cases, Tax on Circulation of Goods and Services (ICMS) are suspended in the initial stage of the production chain. The objective is to avoid cumulativeness and bring domestic costs closer to international conditions, directly impacting prices, margins, and competitiveness.
The most recent data highlight the dimension of this mechanism. Information from the Drawback Siscomex Panels indicates that, between 2022 and 2025, drawback suspension accounted for approximately 20% to 21% of Brazilian exports, which corresponds to values close to US$ 70 billion annually. This volume shows that the regime does not act marginally, but as a structural element of Brazil’s export dynamics, influencing production decisions in different sectors.
At the same time, a relevant asymmetry is observed between exports and imports. While the drawback has a high participation in external sales, its presence in imports remains reduced, standing between 2.5% and 2.8% of the total in the same period, according to data provided by Siscomex. This asymmetry shows that the mechanism is oriented towards enabling specific export flows, without broadly altering the economy’s input structure.
The analysis of input usage reinforces this interpretation. Consumption in the domestic market linked to drawback fluctuated between approximately US$ 0.9 billion and US$ 1.3 billion between 2022 and 2025, representing something between 10% and 13% of the total inputs associated with the regime. This behavior indicates that, although export-oriented, the regime maintains partial integration with the domestic market, increasing its relevance for the domestic productive dynamics.
From a sectoral perspective, the pattern becomes even more evident. The manufacturing industry concentrates most of the drawback operations, followed by the extractive industry. Among the main products exported under the regime, iron ore, cellulose, meats, and semi-manufactured products stand out. This pattern indicates that drawback is mainly concentrated in already consolidated production chains inserted in international trade.
A clear example of this dynamic is iron ore, a highlight in the drawback suspension. In 2025, exports of the product under the regime totaled approximately US$ 9.9 billion, corresponding to about 34% of the total exported via drawback, according to the Drawback Siscomex Panels.
In the general export agenda, the product accounted for about 8.3% of national exports, with values close to US$ 29 billion, according to data from SECEX/MDIC. It is a large-scale sector, highly exposed to international prices and dependent on logistical efficiency and costs. In this context, the reduction of the tax burden on inputs preserves margins, but does not alter the structural determinants of its international insertion.
The dynamics of beneficiary companies add another layer of analysis. The number of participants in the regime exceeded 2,000 companies in 2023, falling to approximately 1,900 companies in 2025. It is observed that companies with exports of up to US$1 million concentrate the majority of the regime’s beneficiaries in terms of the number of companies. Nevertheless, these companies account for a small portion of the total export value, which remains concentrated in larger-scale operations, reflecting the very structure of Brazilian foreign trade. This pattern shows that, although access to the regime is relatively widespread, its economic effects remain concentrated in larger operations.
Another relevant aspect is the relationship between replacements and imports within the scope of the regime. Data from the Drawback Siscomex Panels indicate that, between 2022 and 2025, replacement operations consistently accounted for more than 70% of imports linked to drawback, evidencing the predominance of this type of operation throughout the period. This data suggests that the mechanism not only enables specific exports but sustains continuous production cycles, especially in organized and integrated industrial chains.
It is at this point that the debate ceases to be exclusively fiscal and takes on broader contours. The drawback suspension reduces costs, increases margins and favors international competitiveness. However, by being directly conditioned on exports, it also inserts itself into an economic environment that tends to reinforce already established production patterns.
In a scenario where commodities and intermediate goods continue to play a central role in the export agenda, the performance of the regime raises broader reflection. Tax relief instruments contribute to short-term efficiency, but their long-term effects depend on how they articulate with the productive development strategy.
It is not about questioning the relevance of the drawback. The data indicate that the regime fulfills its function by reducing costs and sustaining the competitiveness of Brazilian exports. The central issue is not its effectiveness, but its effects on the productive structure: whether it acts as an instrument for diversification or as a mechanism for reinforcing already established patterns.
Between the pursuit of competitiveness and the construction of a more diversified productive structure, the drawback suspension reveals a recurring dilemma in public policies. The challenge lies not only in its existence but in how its incentives connect with the country’s economic trajectory.
The discussion, therefore, does not end with the analysis of the regime itself. It extends to its capacity to dialogue with a broader development agenda, in which efficiency, diversification, and international integration need to be considered in an integrated manner.
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Who wrote this column
Bruna Esteves
