Government Considers Early Resumption of Diesel Taxes to Fund Program for Promoting Sales of Affordable Cars in Brazil

Written by Paulo Nogueira

Published on 06/06/2023 at 16:02

Updated on 06/06/2023 at 16:09

Marcelo Camargo/Agência Brasil

Be the first to react!

The Diesel Balance: The Weight of Replacing Taxes in the Brazilian Economy

A new alternative to finance the program to stimulate the sales of popular cars is being considered by the government: the anticipation of the return of federal taxes on diesel. If this proposal is accepted, the reimposition of diesel taxes will take place in two phases, one in September of this year and the other in January 2024. Although seen as a financial solution, experts point to a possible inflationary impact, affecting consumers’ pockets.

The Return of Taxes: Anticipated Effects

The Provisional Measure (MP) suggesting the reimposition of diesel is ready to be evaluated by Congress. The proposal aims not only to compensate for the reduction in revenue but also considers linking the car discount policy to a “green package” from the Ministry of Finance. This package is a set of initiatives aimed at energy transition, a strategy that may reduce environmentalists’ criticism of the popular vehicle program.

In the original measure from the Ministry of Development, Industry and Trade (MDIC), the intention was to reduce the cost of cars priced up to R$ 120 thousand produced in the country. Now, with the new MP, the cuts in PIS, Cofins, IPI, and IOF will be replaced by tax credit for automotive companies. This means that instead of a discount of 1.5% to 10.96% on the value of the vehicle via tax reduction, bonuses of R$ 2 to R$ 8 thousand will be offered. This amount will be applied to the consumer’s invoice and compensated by automakers in tax collection.

ARTICLE CONTINUES BELOW

The Diesel Challenge: A Reimposition in Two Stages

The government believes that the reimposition of diesel taxes in two stages can minimize the inflationary impact. Additionally, the expectation is that the fall in the price of oil barrels and the devaluation of the dollar against the real will prevent a significant increase in the price of diesel. However, the historical record of government measures shows us that an action without repercussions is rare. If Congress approves the MP, diesel consumers can expect a 12% increase in taxes.

In March of this year, consumers felt the impact of the return of PIS and Cofins charges on gasoline and ethanol. Gasoline was the product with the greatest weight in the IPCA (National Consumer Price Index), accounting for 0.39% of the total, contributing to an inflation rate of 0.71%.

The effects of the reimposition of diesel taxes deserve close monitoring. After all, this fuel is vital for the country’s logistics, responsible for moving about 65% of cargo via road transport. When there are changes in diesel prices, the prices of all products consumed in the country can be affected.

Antonio Ticianeli is an energy specialist and CEO of Ecomanda Americas
Disclosure — **Antonio Ticianeli is an energy specialist and CEO of Ecomanda Americas**
*Disclosure*

Government Considers Early Resumption of Diesel Taxes to Fund Program for Promoting Sales of Affordable Cars in Brazil

The Diesel Balance: The Weight of Replacing Taxes in the Brazilian Economy

The Return of Taxes: Anticipated Effects

The Diesel Challenge: A Reimposition in Two Stages

While a traditional school may take several days just to raise walls, in Malawi a 3D-printed school had its structure ready in 18 hours, welcomed children in June, and showed a new solution to the lack of classrooms.

Goodbye traditional washing machine: Panasonic surprises housewives with the NA-G5 featuring four drums, a 13 kg washer and dryer, a 12 kg dryer, independent mini washers, a heat pump, and a 4-in-1 system awarded at the German Design Award.

With a diameter of 15.08 meters, a length of 182 meters, and weighing 3900 tons, the world’s largest tunnel boring machine for drilling super hard rock made a 9 km tunnel in Georgia and impresses with its excavation power.

Material once seen as a poor man’s choice returns as a climate bet, with red clay replacing part of the gray concrete in modern buildings, hospitals, houses, and a cultural center that transforms tradition into a solution against urban heat.

Study solves great ancient mystery: remains of Philip II, father of Alexander the Great, are identified in Vergina and resolves the enigma of the Macedonian royal tombs that had lasted half a century.

Larger than the Toyota Hilux and with a towing capacity of 3.5 tons, the new MG U9 2026 features a 2.5 turbodiesel engine, 520 Nm, 4×4 traction with three locks, and an almost full-size build.

Itaú closes the only branch in Itaú de Minas, leaving the city of 14,400 inhabitants without in-person service and upsetting residents who will now have to travel 17 km.

The Soviet Union designed a tank to fight after the nuclear apocalypse, the Object 279, a nearly 60-ton machine with a flying saucer shape and four tracks, capable of not overturning even in the face of the shockwave of an atomic bomb.

Brazil records two earthquakes on the same night, one with a magnitude of 3.3 off the coast of Rio de Janeiro and another with a magnitude of 2.8 in Tocantins.

The CO2 from pollution is already rising within human blood, and a new study warns that if nothing changes, in about 50 years this gas could exceed the healthy limit in the body, with the greatest risk falling precisely on today’s children.

Hong Kong built 1,800 housing units in just 12 months using prefabricated modules in China, while the same type of traditional public housing would take an average of 4.1 years. The United Court project was the first fully completed transitional housing in the city.

Government Considers Early Resumption of Diesel Taxes to Fund Program for Promoting Sales of Affordable Cars in Brazil

The Diesel Balance: The Weight of Replacing Taxes in the Brazilian Economy

The Return of Taxes: Anticipated Effects

The Diesel Challenge: A Reimposition in Two Stages

While a traditional school may take several days just to raise walls, in Malawi a 3D-printed school had its structure ready in 18 hours, welcomed children in June, and showed a new solution to the lack of classrooms.

Goodbye traditional washing machine: Panasonic surprises housewives with the NA-G5 featuring four drums, a 13 kg washer and dryer, a 12 kg dryer, independent mini washers, a heat pump, and a 4-in-1 system awarded at the German Design Award.

With a diameter of 15.08 meters, a length of 182 meters, and weighing 3900 tons, the world’s largest tunnel boring machine for drilling super hard rock made a 9 km tunnel in Georgia and impresses with its excavation power.

Material once seen as a poor man’s choice returns as a climate bet, with red clay replacing part of the gray concrete in modern buildings, hospitals, houses, and a cultural center that transforms tradition into a solution against urban heat.

Study solves great ancient mystery: remains of Philip II, father of Alexander the Great, are identified in Vergina and resolves the enigma of the Macedonian royal tombs that had lasted half a century.

Larger than the Toyota Hilux and with a towing capacity of 3.5 tons, the new MG U9 2026 features a 2.5 turbodiesel engine, 520 Nm, 4×4 traction with three locks, and an almost full-size build.

Itaú closes the only branch in Itaú de Minas, leaving the city of 14,400 inhabitants without in-person service and upsetting residents who will now have to travel 17 km.

Lula government releases R$ 1.16 billion through the New PAC to renew public transportation in Brazil with 727 buses in cities of São Paulo, Pernambuco, Minas, Rio, and other states, including electric and less polluting models.

Chinese agricultural machinery giant lands in the heart of Brazilian agribusiness and chooses Sinop, in the north of Mato Grosso, to open its first dealership in the country, targeting cotton, corn, soybean, and sugarcane producers in the region.

BNDES and the Ministry of Cities went to China and Germany with R$ 3.73 billion on the table to convince electric bus manufacturers to open factories in Brazil, and the guarantee of public purchase is the main argument to attract national production.

Supermarket giant closes 28 stores in Brazil and lays off 6,600 employees after halting accelerated expansion in the North and Northeast.

Itaú closes the only branch in Itaú de Minas, leaving the city of 14,400 inhabitants without in-person service and upsetting residents who will now have to travel 17 km.

The Soviet Union designed a tank to fight after the nuclear apocalypse, the Object 279, a nearly 60-ton machine with a flying saucer shape and four tracks, capable of not overturning even in the face of the shockwave of an atomic bomb.

Brazil records two earthquakes on the same night, one with a magnitude of 3.3 off the coast of Rio de Janeiro and another with a magnitude of 2.8 in Tocantins.

The CO2 from pollution is already rising within human blood, and a new study warns that if nothing changes, in about 50 years this gas could exceed the healthy limit in the body, with the greatest risk falling precisely on today’s children.

Hong Kong built 1,800 housing units in just 12 months using prefabricated modules in China, while the same type of traditional public housing would take an average of 4.1 years. The United Court project was the first fully completed transitional housing in the city.