Brazil's Decree 7567 Would Increase Tax on Imported Vehicles by 30%

Automotive Tax Insights

On September 15th, the Brazilian government announced Federal Decree number 7567. The decree has a dual purpose - to reduce demand for imports and to encourage local manufacturing and export growth. The headline change is the 30% increase across the board in Federal Excise Tax rates on certain imported vehicles and auto parts. It is expected that the rate rise could increase prices of vehicles not meeting the above conditions by 25-28%. In theory the 30% hike in sales tax rates on imported vehicles should slow their rise in the Brazilian market. However, already high levels of investment in Brazil's auto sector together with Mecosur and Mexican exemptions could limit the market impact of the decree.



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