Cargo transport sector fears the end of zero import tax rate for truck tires

Tire imports are still suffering from the effects of the pandemic. The rise in the dollar and the price of international freight squeezed profit margins and even removed many importers from this market.

Systematic delays in supplying tires to dealers, truck assemblers, and highway equipment providers have generated losses and assembly line mismatches. The delays also harm truck drivers who are experiencing difficulties in purchasing replacement tires.

The federal government gave a temporary relief in this scenario of high demand and rising prices by zeroing the import tax (II) for five sizes of truck tires earlier this year. It turns out that the agreement that allowed the tax to be zeroed is now expiring on December 31st, and if it is not renewed, imports are likely to become unfeasible, further overloading the national industry and raising prices due to lack of supply.

The agreement permitted the resetting of the tax

The decision to zero the import tax on truck tires was implemented through a resolution by GECEX (the executive management committee of CAMEX) which included the five tire sizes in a list of Mercosur tariff exceptions called LETEC.

Besides transporter representatives, one of the entities that helped to encourage the federal government to temporarily zero the import tax in order to balance the market was the Brazilian Association of Tire Importers and Distributors (ABIDIP). At the end of 2020, the organization alerted the press and authorities about international freight soaring to levels never seen before and showed the effects of high consumer prices the lack of tires on the market.

See a chart that shows the track record of Brazilian tire imports starting from 2019. The data was originally published in DataLiner:

Brazilian Tire Imports (HS 4011) I Jan 2019 to Oct 2021 I TEU

Table source: DataLiner (click here to request a demo)

Now ABIDIP is again mobilizing the affected sectors to show that the problem has not yet been resolved and, therefore, the zeroed import tax, at least for cargo tires, would need to be maintained. “The price of freight has not dropped, tires are still more expensive in Brazil than in the rest of the world, with various situations of shortages”, warns the entity.

Source: Cargo News

To read the full original article, access the link:  http://www.cargonews.com.br/setor-de-transporte-de-cargas-teme-o-fim-da-aliquota-zero-de-imposto-de- import-for-truck-tyres/

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