12/31/2023 – 16:20
The vice-president and minister of Industry and Commerce, Geraldo Alckmin, announced this Sunday, the 31st, that the tax benefit granted to automakers will be financed, in part, by the increase in the import tax on electric and hybrid cars.
The Green Mobility and Innovation program (Mover) was created through a provisional measure published on Saturday night, the 30th, and will cost R$3.5 billion in 2024. In total, by 2028, it will be R$19.3 billion.
The incentive will be granted to automakers for investments in decarbonization, that is, in the production of vehicles that reduce greenhouse gas emissions, especially hybrids and electric vehicles.
The granting of tax incentives, however, is a topic that divides economists, as it creates artificial advantages for local producers over their external competitors, which reduces the efficiency of the economy.
In the interview he gave this Sunday, Alckmin stated that the aim is to encourage local production. Import tariffs, which have been zero for electric cars since 2015, and reduced for hybrids, will gradually rise again from January and will return to the full rate, 35%, over three years.
The announcement of the re-encumbrance was deliberated by the Chamber of Foreign Commerce (Camex) in November, discontenting companies such as the Chinese BYD and GWM, which will start producing hybrid and electric cars from 2024 and will still have to import several models to gain market share. market, and General Motors, which had plans to produce electric cars locally in the future.
“(Imported) vehicles will gradually increase until 2027 so that they produce in Brazil, manufacture in Brazil. We want a factory here and not become an importer of products. So install the factory here”, said Alckmin.
There will be quotas for manufacturers and importers without the tax increase, but, according to Alckmin, they will fall annually.
Of the amount foreseen in tax waivers in 2024, the government had already reserved R$2.9 billion in the budget. Another R$600 million, according to Alckmin, will come from the tax increase for electric and hybrid vehicles.
He also spoke about the government's intention with the measure. “I will evaluate and encourage less polluting industry with decarbonization, but evaluating from the 'well to wheel', how I form this fuel. In the case of ethanol, I go from sugarcane production to fuel consumption. From 2027 onwards, it will be from cradle to grave, that is, we will check everything from how the car is manufactured to how it will be disposed of,” he stated.
Accelerated depreciation
The vice president also commented on the urgent bill sent by the government to Congress on Saturday night. This is accelerated depreciation, which aims to encourage the purchase of more modern equipment by the industry.
With the program, manufacturers who purchase new equipment in 2024 will be able to deduct the tax costs of the tax due, 50% in 2024 and 50% in 2025. The instrument to encourage the purchase of machines already exists, but the use of credits takes place in an elongated way, in up to 20 years. By accelerating the use of credits, the government hopes that more companies will buy new equipment.
The cost of the measure will be R$3.4 billion over two years. In 2024, there will be R$1.7 billion in tax waivers. In this case, according to Alckmin, the resources will come from the increase in taxation on the import of photovoltaic energy equipment, the rate of which will increase to 10.4% in 2024. Tax benefits for importers who are investing will be gradually reduced until 2027.
“All measures were approved at Camex, always in line with strengthening the industry, manufacturing in Brazil. The industry is the forefront of research, innovation. Pay higher salary, add value. We need to reinforce the industrial area and a new industry, based on innovation and decarbonization,” he said.
The sectors that will be able to enjoy the benefit of accelerated depreciation will be defined after the law is approved by presidential decree. Alckmin said, however, that the list will not be restrictive.
“It will be the vast majority of sectors, it is easier to ask which ones will not benefit. They are the ones who already have this stimulus”, said Alckmin.
“The objective is to attract investments to Brazil, productivity, competitiveness and decarbonization. Brazil will be at the forefront of decarbonization with the 'well to wheel' concept and not the 'tank to wheel' concept (it only measures the pollution emitted by the car). There is no country in the world with such advanced legislation”, said Alckmin.
The vice-president also stated that the aim is to ensure that, in the case of solar energy, the equipment is manufactured in Brazil.
“In just one solar park there were 1.250 million solar panels, all imported. We want to manufacture solar panels,” said Alckmin. “We said: 'Look, you will have import quotas at zero rates for three years, but in three years you already know that you will have to pay, the quota will fall'. This is so that companies can set up here in Brazil, grow here in Brazil, Brazil will be the champion in renewable energy and we want this industry here in the country”, said Alckmin.
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