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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.
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The exodus of Brazilian industries to Paraguay is already changing the logistics of the South, putting pressure on BR-277, shifting cargo between ports, and raising an alert about competitiveness in the country.
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China reduces imports to 6.5 million barrels per day, keeps oil prices below $100, and eases global pressure even with Hormuz closed.
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He had to sell 13,000 head of cattle, farms, and almost everything he had to save his father’s company, which is well known among Brazilians, during the Collor Plan crisis.
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More than 230 Brazilian companies move production to Paraguay, pay a tax rate close to 12%, compared to about 80% in Brazil, and use Mercosur to sell back to the domestic market without import tax.
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.
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