Importers fear tax hike on hybrids and electrics

The availability of cars in Brazil is so far below demand that businessman José Luiz Gandini, importer of the Kia brand, can barely see the vehicles arriving from Korea. “All the ship has to do is pull over and the car will leave,” he says. And if it wasn’t enough to be experiencing a global shortage of components, increasingly high freight prices, and the rise in the dollar, now importers have one more concern: the possibility of the government raising the import tax on hybrid and electric models, which turned into an imported brand specialty.

Today, the import tax on hybrid and electric models ranges from 0% to 4% depending on the level of emissions and fuel economy. The current rates expire on December 31st. The government has not yet commented on the matter. Behind the scenes, importers have already heard members of the economic team defend the increase in rates to 2% to 7%

The country does not currently produce any 100% electric car and only one company, Toyota, manufactures two hybrid models. Those who defend the increase in the tax would be relying on this local production of hybrids to exclude the category from the list of exceptions in the Mercosur Common External Tariff.

If nothing is done to maintain or raise the tax, the import tax on hybrids and electrics will automatically rise to 35%, to the detriment of importers, especially those who depend on products that come from distant countries. Since he became the importer of the Kia brand in 1993, Gandini used to wait an average of 32 days for a ship to arrive from Asia. The last batch he ordered took 96 days.

It is not just the possibility of the import tax going up that can make cars coming from abroad more expensive. Shipping and containers are also much more expensive.

Source: Valor Econômico

To read the full original article, visit the link:

https://valor.globo.com/empresas/noticia/2021/12/07/importadores-temem-por-aumento-de-imposto-em-hibridos-e-eletricos.ghtml

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