In times of fiscal crisis, states set up ICMS system for automobiles



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247 – To improve the tax situation, at least five states in the country are preparing an increase in the ICMS tax (tax on the movement of goods and services) applied to the purchase of cars. In Alagoas, Pernambuco and Sergipe, vehicle taxes will rise from 12% to 14% from April, according to the state administrations themselves. In Acre and Amapá, the percentages are not defined, but the increases should go from 12% to something between 14% and 18%. The new rates can only come into effect in April because of the statutory 90-day period for any ICMS system change.

There are also rumors of readjustment at Mato Grosso do Sul, but for now, the state government says the rate is kept at 12%.

Leaders related to automakers told the Folha newspaper of S.Paulo that other states were also discussing the issue. According to Antonio Megale, president of Anfavea, an badociation of car manufacturers, "if the ICMS system soars, the consumer will pay the difference." "According to Bernard Appy, director of the CIF (Center for Fiscal Citizenship), the biggest risk is that these ICMS readjustments mean the return of a tax war." It is not possible to absorb this increase without affecting the price of the vehicle. "which, decades ago, brought the Brazilians to visit the neighboring state to buy a cheaper car."

According to a report by Raquel Landim, published in the journal Folha de S.Paulo "Confusion is the end of a Confaz agreement, the council bringing together state secretaries of finance from across the country, in effect for more than 20 years and expiring on December 31, 2018. L & # 39; The agreement mentioned tax benefits granted by 13 states of the Federation to the automotive sector: Acre, The rule allowed these states to reduce the ICMS system from the 17% or 18% forecast in the first half. their local laws at 12%. "

Sergipe's finance department said it had decided to retain some of the benefits for the auto sector because the end of the Confaz agreement would carry the system ICMS of vehicles in the state to 18% .The increase to 14% would aim to "correct the distortions that occurred during the 20-year validity of the agreement, which is expected to last only six month. "

The Pernambuco Ministry of Finance announced the inclusion of new products – such as the 1.0-liter car and the 250-cylinder motorcycles – at Fecep (National Fund for Poverty Alleviation and Development). The Fund allocates an additional 2% tax on the ICMS system for actions related to social badistance, food security and nutrition.

The Ministry of Finance, Alagoas has confirmed that it will readjust the ICMS vehicle system to 14%

That of Mato Grosso do Sul announced that it would have an ICMS system of 14% and the others of 12%. that a decree keeps the tax at 12%. And Acre said that the new leadership did not define the percentage increase in the ICMS system, but that this rate should reach something between 14% and 18%.

In the case of high value goods, it is useful for the consumer to make the trip to the looking for a discount, especially in the northeastern states, where distances are low, or in the regions of the currency.

Confusion is the end of an agreement by Confaz, the council that brings together state secretaries to finance the entire country, in effect for more than a month.

The agreement referred to tax concessions granted by 13 States of the Federation for the automobile sector: Acre, Alagoas, Amapá, Bahia, Ceará, Goiás, Mato Grosso do Sul, Pernambuco,

The rule allowed these States to reduce the ICMS system from the 17% or 18% provided for in their local legislation to 12%. In this way, it amounted to homage paid throughout the country.

At the end of last year, representatives of the industry have requested the renewal of the agreement, but states have resisted

Public accounts of the state have suffered with falling incomes, which have not yet recovered from the recession of recent years, and a structural problem, namely the growing expense of active and inactive servants.

According to the people who followed the subject closely, Pernambuco came in first. a joint agreement to sew a new agreement increasing the number of ICMS vehicles from 12% to 14% across the country, but no agreement has been reached and the current agreement has expired.

For the moment, ICMS increases are limited to states. According to the report, automakers' executives fear however that, if the tribute increases, vehicle price adjustments

By 2018, the auto industry had sold 2.57 million vehicles, or 14 , 6% more than in 2017. However, it still operates with an unused capacity of 45% in factories.

Governments state that they will retain part of the benefit

The report was unable to contact the Amapá secretariat.

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