Government extends reduced IPI tax for automobiles.

247 The government has decided to extend the lower IPI (Tax on Industrialized Products) until the end of this year. The tax, which was scheduled to increase next Monday, will remain between 2% and 8%, Finance Minister Guido Mantega said in an interview with... National JournalThis is the fourth time the government has extended the tax reduction for the sector, according to TV Globo, on Saturday night.

The measure aims to "avoid the risk of a drop in sales throughout the year," according to Mantega. "The automotive industry is very important to the Brazilian economy. It represents 25% of industrial production. So, to keep industrial production growing, it is important that the automotive industry continues to grow," the minister stated.

The minister informed that the tax will remain the same for all vehicle categories that had their IPI (Tax on Industrialized Products) reduced: cars, utility vehicles, and trucks. At the end of the year, according to him, the government will decide whether the tax will remain at the same level or increase. The government also stated that it seeks to stimulate not only the automotive sector with this decision, but "the entire automotive chain, including the auto parts, upholstery, and accessories industries."