Program expires this Friday (May 31); project that continues is stalled in the Senate after inclusion of “jabuti”
O Move program (Green Mobility and Innovation), which encourages the decarbonization of Brazilian vehicles, is suspended from this Friday (May 31, 2024), according to the MDIC (Ministry of Development, Industry, Commerce and Services).
The suspension is due to the validity of the program established by an MP (provisional measure) until the last day of May this year. Continuity is provided for in a bill, which is stalled in the Senate after weeks of negotiations in the Chamber due to the inclusion of “jabuti” which taxes imports of up to US$50.
The inclusion of the device that ends the exemption for foreign purchases delayed the progress of the Mover PL in the Chamber. The proposal was presented in March, but the impasse in reaching an agreement with the government on taxation hampered the approval of the basic text.
Mover provides a tax incentive for companies to invest in decarbonization and comply with the program’s mandatory requirements.
Automakers are charged with minimum recycling limits when manufacturing vehicles. On the other hand, there is less tax charged for those who pollute less, with the creation of the Green IPI.
The MDIC informed that registered companies will not have the benefits granted affected, but the granting of new credits is suspended until the bill is approved in the Senate and sanctioned by the president Luiz Inácio Lula da Silva (PT).
PROGRAM INCENTIVES
The Mover PL determines a tax incentive of R$19.3 billion until 2028 for automakers that meet decarbonization criteria.
The amount is divided as follows:
- 2024 – R$3.5 billion;
- 2025 – R$3.8 billion;
- 2026 – R$3.9 billion;
- 2027 – R$4 billion;
- 2028 – R$4.1 billion.
The objective of the program is to reduce carbon emission rates from the automobile industry by 2030. Therefore, the inclusion of taxation on small foreign purchases was criticized by opposition and PT deputies as they understood that it made no sense for the device to be included. in this bill.
TAXATION
At the beginning of 2024, Minister Fernando Haddad’s economic team was looking for a way to end the federal exemption to increase revenue, but Lula vetoed the possibility due to the unpopularity of the measure in the middle of an election year.
The president followed the position of the first lady, Janja, who said she was against taxation. The Treasury left the matter aside, but the topic came up again with the device included in the Mover PL. After resisting, Lula agreed to negotiate the taxation of small imports at a reduced rate.
Last week, the head of the Executive met with the president of the Chamber, Arthur Lira (PP-AL), at Palácio do Planalto, to negotiate a “half term”.
The Mover PL report was updated by rapporteur Átila Lira (PP-AL) with the federal rate of 20% for purchases of up to US$50, to increase government support for the proposal.
The Mover PL was approved on Tuesday (May 28, 2024) last week. The text was not voted on by the senators, who asked for more time to look into the issue.
The expectation in Congress is that the Senate will approve the project on Tuesday (June 5), so that it can be taken to presidential sanction and, thus, the Mover program can come back into force.
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