LatinNews Daily - 26 May 2023

In brief: Tax breaks aim to boost Brazil’s car industry

* Brazil’s President Luiz Inácio Lula da Silva has unveiled a series of measures aimed at making cars more affordable and stimulating growth for vehicle manufacturers, including a reduction in federal taxes for carmakers. Vice President Geraldo Alckmin, who also serves as the minister of industry and commerce, stated that the tax breaks would be for the production of vehicles worth up to R$120,000 (US$23,827) and that the measures could result in potential reductions in final car prices ranging from 1.5% up to 10.96%. Alckmin highlighted that the tax discount would vary depending on several factors, such as the vehicle’s energy efficiency and its price, stating that “today the cheapest car costs around R$70,000. We want to decrease this price. The more accessible [the vehicle], the greater the discount in IPI, PIS and Cofins,” referring to federal taxes levied on businesses. Speaking at an event of the business lobby group Federação das Indústrias do Estado de São Paulo (Fiesp), Lula stressed the need to “halt the process of deindustrialisation,” adding that his government’s measures would “create the conditions for our domestic market consumption to regain its vigour.”

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