English 
Spanish 
3 min read
0 comments
In Brazil, the Motor Vehicle Ownership Tax (IPVA) is one of the most debated taxes. With a calculation logic based on the value of the vehicle and not on its efficiency or environmental impact, the IPVA stands out as a tax that defies economic and environmental logic.
IPVA, a state tax charged annually to vehicle owners, was established in 1985 in Brazil to replace the Single Road Tax (TRU), created during the military regime. Its initial objective was to finance the construction and maintenance of highways, but over the years, the resources collected were diverted to general public administration expenses.
With revenue that reached R$33 billion in 2020, IPVA represents a significant source of revenue for states and Brazilian municipalities. However, the deterioration of Brazilian roads increased by 50% in 2022, highlighting a disconnect between tax collection and the improvement of road infrastructure.
The controversy surrounding IPVA is not limited to its application
The tax calculation logic, based on the market value of the vehicle and defined by the Fipe table, ends up discouraging the purchase of new, more efficient and less polluting cars. This is because new vehicles, which cost more, result in a higher IPVA. In contrast, developed countries offer tax incentives for electric and less polluting cars, a policy that Brazil has not yet effectively adopted.
- Discover Europe's longest ice road, where seatbelts are banned to save lives
- Terror at gas stations! Volkswagen Polo now has a naturally aspirated engine that is more economical than ever and autonomy reaches more than 15 km/l
- China is dominating the motorcycle MARKET and leaving traditional manufacturers in panic
- China's electric car graveyard grows 'grey import' scheme to allow used and potentially dangerous electric cars into automotive market
The IPVA tax logic has led to questionable practices on the part of local governments. For example, municipalities and states create requirements that require the greatest number of licenses in their territory, thus increasing tax collection. This situation generates a vicious cycle, where the high tax burden increases the price of new cars, inhibiting fleet renewal and keeping older, polluting vehicles in circulation.
The complexity of the Brazilian tax system is even more evident in the case of electric cars
While other nations encourage the adoption of these vehicles through tax benefits, Brazil is moving in the opposite direction, reducing exemptions and equalizing import rates for eletric cars to combustion vehicles. This decision, justified as a stimulus for local production, could result in less competitiveness and limited access for Brazilians to more sustainable vehicles.
IPVA, therefore, stands out as one of the most controversial taxes in Brazil. Although it is an important source of revenue for state and local governments, its economic and environmental implications, as well as the lack of transparency about its application, raise significant questions about its effectiveness and fairness.
Be the first to react!