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Government Aims to Advance Diesel Taxes to Fund Sales of Popular Cars; Reinstatement of Taxes Could Increase Fuel Prices by 12%, Trigger Truckers’ Strike, and Have Major Impacts on Consumer Goods Prices in the Country

Written by Flavia Marinho
Published on 12/06/2023 at 05:28
Updated on 13/06/2023 at 15:53
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reoneração do diesel para financiar compra de veículos pode gerar greve dos caminhoneiros com alta desse combustível – Imagem Brasil 247
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If The MP Is Approved, Those Who Fuel Vehicles With Diesel Can Expect A 12% Increase In Tax Rates.

The Brazilian government is considering expediting federal taxes on diesel as a solution to finance the stimulus program for the sale of popular cars. This measure, which was initially planned for next year, may occur in two stages: half in September this year and the other part in January 2024. View how this advance in tax rates may affect truck drivers, consequently impacting consumers’ wallets and potentially having an inflationary impact, according to economic experts’ evaluations.

A Provisional Measure (MP) is ready to be reviewed in Congress, proposing the anticipation of the reimposition of taxes on diesel as a way to compensate for revenue losses. This proposal also considers the implementation of a “green package” from the Ministry of Finance, linked to the policy for reducing vehicle prices.

Unlike the original plan from the Ministry of Development, Industry and Trade (MDIC) to reduce the cost of popular cars priced up to R$ 120,000 produced in Brazil, the MP foresees replacing cuts to PIS, Cofins, IPI, and IOF with tax credits for companies in the sector. Instead of a tax reduction between 1.5% and 10.96% on the value of the vehicle, as initially proposed, consumers will be able to receive bonuses of R$ 2,000 to R$ 8,000 on the invoice, which will be compensated by automakers in tax collection.

Truck Drivers May Join Strike, As They Will Be The Most Affected By The Reimposition Of Diesel

The government’s expectation is that the reimposition of diesel taxes in two stages will dilute the inflationary impact. It is also believed that there will not be a significant increase in diesel prices due to the decline in the price of oil barrels and the depreciation of the dollar against the real.

However, historically, measures of this type have severe consequences for the Brazilian consumer. If the MP is favorably approved by Congress, those who fuel vehicles with diesel can expect a 12% increase in tax rates.

In March of this year, consumers already felt the impact of the return of PIS and Cofins charges on gasoline and ethanol. According to the IPCA (National Consumer Price Index), gasoline was the subitem with the highest weight among 377 evaluated products. In the same month, inflation was at 0.71%, and fuel accounted for more than half of that value.

The consequences of the reimposition of diesel taxes deserve attention, as this fuel is crucial for the entire logistics chain and will directly affect truck drivers, who, feeling pressured, may join the strike. About 65% of freight in Brazil is transported by road using diesel. Historically, when there are changes in diesel prices, all products consumed in the country experience price impacts.

Flavia Marinho

Flavia Marinho é Engenheira pós-graduada, com vasta experiência na indústria de construção naval onshore e offshore. Nos últimos anos, tem se dedicado a escrever artigos para sites de notícias nas áreas militar, segurança, indústria, petróleo e gás, energia, construção naval, geopolítica, empregos e cursos. Entre em contato com flaviacamil@gmail.com ou WhatsApp +55 21 973996379 para correções, sugestão de pauta, divulgação de vagas de emprego ou proposta de publicidade em nosso portal.

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