The government has ordered a tax break for the export of vehicles

One of the measures taken by the government to comply with the fiscal targets agreed with the IMF and improve revenue collection has been the reduction of export refunds. A decision that had a strong impact on the automotive sector and For many companies, it has ceased to be a company exporting cars to Brazil.

Now, by a decree published Wednesday in the Official Journal, the decision was canceled, at least for car manufacturers. Y the percentage of tax refund went from 2.5% to 6.5% which is granted to car companies that export their production to destinations within Mercosur.

In the text of the resolution, the government admitted that the complete restructuring of the export refund regime last year was due to the international context and the need to strengthen the tax situation.

But that these changes have generated a "contractive dynamic"in exports and throughout the value chain, because of its importance to total production". During the period following the adoption of the above-mentioned measure, some distortions that it is necessary to eliminate, by unifying the aliquots on export refunds related to the automotive sector ", was highlighted in the decree bearing the signature of President Mauricio Macri.

"We hope that the unification of the withdrawals will recover the dynamism of the level of exports and motorized an increase in production units scheduled for the year 2019, "said the Minister of Production and Labor, Dante Sica. 60% of local automotive production is sold worldwide and, in this percentage, 70% of the destinations belong to the Mercosur countries.

Sector companies have received the news with some relief. "This change is in line with NWAC's proposal to improve the competitiveness of the exhibition vehicles in Brazil, which is losing market share. A refund of only 2.5% did not cover one-third of the "exported" taxes. Improves the situation and encourages them to choose the location of parts, but in the short term, it is urgent to generate more exports to improve production, "said Juan Cantarella, General Manager of the Association des Factories Argentine component manufacturing (AFAC)

As Infobae said, the Ministry of Production had been studying this measure for a few weeks. Some builders, hit by increased tax pressure, had already begun to study changes to their production plans.. Fiat, for example, began producing Cronos early last year, focusing on exports to Brazil and lost up to $ 500 per tax change, according to the company. Or Nissan, which began with the manufacture of the Frontier van in the middle of last year, focusing on exports to Brazil.

According to the latest data from the Association of Automobile Manufacturing Plants (Adefa), vehicle production in the first quarter of the year reached 76,692 units, which represent a 30.7% less manufactured in the same months of 2018. At the same time, 47,919 vehicles were exported, 16.4% less than last year. Patents, in turn, fall at a rate above 50% per month.