Brazilian government raises industrial tax on some imported products

The Brazilian government decided to increase the industrial product tax, IPI, for imported motorcycles, microwave ovens, and air conditioners from 20-30% to 35% from May 31st. According to the Federal Tax Administration's explanation, raising the IPI will encourage the import price of related products to be more expensive, except for most products from the Manaus Free Zone.

On the same day, the government also announced the increase of IPI and PIS/CONFINS (social integration program tax and social security tax) for beer and cold drinks, but did not announce the specific ratio of increase. Increasing the taxation of beverages is to compensate for the tax losses caused by tax cuts in his field.

Last week, the government announced to reduce the car's IPI in order to encourage consumption. The Decrease of Motor Vehicles IPI will take effect from August 31st to reduce inventory and maintain balance between production and sales. After the IPI is reduced, the ex-factory price of the vehicle can be reduced by up to 11.5%, and the new price has been put into effect at the store.