Alckmin announces tax cut to lower the price of the popular car by up to 10.79%

BRASÍLIA – The vice-president and minister of Development, Industry, Commerce and Services, Geraldo Alckmin, announced this Thursday, 25th, tax measures that the government will implement to try to lower the price of cars in Brazil.

After meeting with President Luiz Inácio Lula da Silva (PT), Finance Minister Fernando Haddad, and industry representatives, Alckmin stated that the Union will promote a limited time discount on IPI and PIS/Cofins for cars that today costs up to R$ 120 thousand. According to the minister, this reduction will enable a discount on the value of cars that will vary from 1.5% to 10.79%.

Alckmin did not detail how this conversion will take place, but said that the size of the benefit will be defined based on three pillars: social, based on the parameter that only cars of up to R$ 120,000 will have the discount; energy efficiency, considering cars with less CO2 emissions; and, third, industrial density, favoring companies with more components manufactured in the country.

The minister pondered, however, that the Treasury asked for 15 days to establish how these discounts will be applied. The fiscal impact has not yet been calculated because the duration of the incentive measure is still open. “We have fiscal responsibility,” said Alckmin. With the opinion of the Treasury, it will be possible to assess whether the government “effectively” can issue a Provisional Measure on the subject, he said.