Safety auto parts will have reduced tax

The Government will reduce the import tax for auto parts considered security items. The list is being closed between the Ministry of development, industry and foreign trade and the IRS. The tax rate reduction will occur only for products without national manufacturing and the list of equipment shall undergo public consultation for 30 days to receive suggestions.
Despite the new encouragement to the sector, the Government should not take broader applications of the National Association of Automotive vehicle manufacturers (Anfavea), which may result in loss of revenues. The Secretary of development of the Ministry of development, Héloïse Menezes, said the State Government has fiscal space for a broader auto policy or to implement stimulus programs of exports and production of machines, as does the automotive sector. "Based on the concept that has tax waiver, haste decreases," he said.
The announcement of the program named Innovate-auto parts came to be scheduled for the second half of 2013, but has been postponed. "How that event, desmarcamos we're doing things without packaging, without creating a big umbrella," said the Secretary. The President of Anfavea, Luiz Moan, said last week that the launch of the program would be in the first quarter.
Training. Masood said that some measures of the Innovate-auto parts are already being implemented, such as the suppliers development program, which already operates in seven States. "We took assemblers, considering the anchors, and we're training suppliers of small ports to the technical requirements." According to her, the reduction of auto import Tax is not considered exempt and does not enter in the calculation of tax waiver for being a regulatory tribute. The economic team wants to avoid an increase in the cost of production of automakers.
To stimulate the expansion and modernisation of agricultural machinery and road sector, the Anfavea proposed to Innovate, self-propelled Machines. Another proposal to increase exports is being called Export-Auto. The two policies would lead to a further loss of government revenue. According to the Secretary, the measures are under study, but should not turn into a "package".
Innovate's proposal provides for credit Machines tax on industrialized products (IPI) for companies that acquire more auto parts and machinery and equipment. The Export-Auto passes through the exemption of taxes on production, such as the return of Reintegrates, which returned 3% of firms exported value in manufactured goods.
Automotive partners admit the difficulties to which the requests are met. A source, however, said that the sector will continue to put pressure on the Government because he fears a reduction in the market.
The worsening economic situation in Argentina can reduce between 100 thousand and 120 thousand units annual exports of automobiles to the neighbor. The expectation is that Buenos Aires will put more barriers to imports of the Country to improve the flow of foreign currency.
All this at a time when automakers had cost increase with the demand for airbag and antilock brakes to 100% of the vehicles and not see great prospects for growth. The entry of new companies in Brazil, especially the Asian ones, has increased the production capacity of the sector, but the market growth was not of the same magnitude.
Another argument used to put pressure on the Government is that the machinery industry at risk because of Chinese competition. The industry wants an alternative solution if the machines don't Innovate will be accepted by the Government. Besides the tax issue, one of the problems for the implementation of the programme is the risk of Brazil being questioned by the World Trade Organization (WTO). The IPI reduction can be considered a subsidy to the industry.