Brazil's Auto Sector To Benefit From 'Green' Tax Breaks
BRASILIA -(Dow Jones)- The Brazilian government aims to stimulate the use of
flex-fuel low powered cars by a scale of tax incentives, Finance Minister Guido
Mantega announced late Tuesday.
Flex-fuel cars can run on either ethanol or gasoline or a mixture of both
fuels.
Mantega said Brazil would maintain the industrial production tax, or IPI, at
3% for flex-fuel cars with engines with less than 1 liter engines until March
2010.
The government had previously said the IPI for these vehicles would return to
7% on Jan. 1 of next year.
Mantega also said that gasoline-powered cars of 1 liter would have its IPI
rate raised to 7% on Jan. 1, 2010, as planned.
For cars with flex-fuel engines between 1 and 2 liters the 7.5% IPI tax rate
will be maintained until March 31 next year, Mantega said.
Cars with the same potency fueled with gasoline will pay the full 13% IPI rate
on Jan. 1, Mantega said.
Mantega made the announcement alongside Jackson Schneider, president of the
Brazilian Motor Vehicles Manufacturers Association, or Anfavea.
Since November 2008, the government has been providing tax incentives to auto
makers by exempting them from the IPI tax.
Companies then transferred the tax savings to consumers, resulting in as much
as a 7.4% reduction off the sticker price of new vehicles.
By John Kolodziejski; Dow Jones Newswires; 55-21-2586-6086, John.kolodziejski@
dowjones.com (Gerald Jeffries in Brasilia contributed to this story)
(END) Dow Jones Newswires
11-24-091713ET
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