CONTEMPORARY CHALLENGES OF THE MANAUS FREE TRADE ZONE: AN ANALYSIS OF TAX INCENTIVES AND THEIR IMPACTS

Abstract

The paper analyzes the contemporary challenges of the Manaus Free Trade Zone (ZFM), focusing on tax incentives and their economic, social, and environmental impacts. The ZFM is presented as an important regional development tool, responsible for job creation, attracting investments, and strengthening industrialization in the Amazon region, compensating for its logistical disadvantages. The study questions the current effectiveness of this model in the face of global changes, pressures for tax reforms, and sustainability requirements. The central hypothesis suggests that, although tax incentives remain relevant, their effectiveness has decreased over time due to factors such as automation, international competition, and low economic diversification. The theoretical framework addresses the historical evolution of the ZFM, regional development theories, and the role of tax incentives as growth instruments. It also highlights the positive impacts on income and job creation, but underscores challenges such as economic dependence, environmental fragile areas, and limited local production integration. Methodologically, the research is descriptive, based on a literature review and documentary analysis. Furthermore, it proposes a comparative analysis with other free trade zones. Finally, the study concludes that the ZFM needs to undergo structural adjustments, focusing on innovation, productive diversification, sustainability, and better management of incentives. These changes are essential to ensure the continuity of the model as an effective instrument for regional development and the preservation of the Amazon. In addition, the transition to the bioeconomy emerges as a strategic alternative to reduce dependence on traditional industry, promoting investments in green technology, local bio-industries, and the conservation of natural resources in the tropical rainforest.