The Ministry of Finance tried to clarify the situation surrounding the announced incentives for the automotive industry. According to Minister Fernando Haddad (PT-SP), the duration of lower prices, caused by the reduction of some taxes, will be 3 to 4 months.
It was already known that the entire project announced by the Vice President and Minister of Development, Industry, Commerce and Services, Geraldo Alckmin (PSB-SP), would be provisional, but the deadline revealed by the Ministry of Finance was shorter than imagined. .
Haddad’s explanation is that this is the necessary time for the automotive industry to face the economic moment and empty the patios, in addition to avoiding the closing of factories. From a few years ago, names like Ford and Mercedes-Benz had their plants deactivated, and many other assemblers adopted the scheme of layoff due to lack of demand.
Haddad hopes that, with an eventual economic improvement, with a drop in interest rates, an improvement in purchasing power and credit availability, the price of cars may fall naturally, without the state subsidy. The Treasury accounts are that the impact of these 3 or 4 months should be R$ 2 billion in collection, which can be “paid” if sales increase substantially.
What will be the drop in car prices?
The cuts announced by Minister Alckmin could range from 1.5% to 10.79% in the rates of the IPI (Tax on Industrialized Products), PIS (Social Integration Program) and COFINS (Contribution for Social Security Financing). These numbers, however, depend on some rules established by the government, such as:
- Initial value: the lower the value of the car, the less taxes it will pay;
- Issuance: the less emissions the engine makes, the less taxes will be charged;
- Production: the more national parts are used, the greater the discount.
The government’s idea was for prices to be lower than R$60,000, something that could happen with a few more moves by automakers, such as the withdrawal of equipment. But, in principle, in the best scenario, the cheapest cars in Brazil, Renault Kwid and Fiat Mobi, would go from R$ 68,990 to R$ 61,401.
Source: Jornal da Globo/Globo News
