Published on : Jul 10, 2014
The car and furniture sales in Brazil are safeguarded to its fiscal accounts. It is a six month extension policy where the government would raise tax on the IPI, manufactured goods, or other furniture sales July 1 onwards.
According to Finance Minister Guido Mantega, the policy is kept in consideration even for times when sales are down and jobs are skeptical. He informed this to the reportersafter a meeting with the auto industry leaders in Sao Paulo.
Brazil is the home base, ranking fourth in the car making market. It is a hub of operations for carmakers which also includes Germany’s Volkswagen AG, Ford Motor Co,Italy’s Fiat, and U.S. based General Motors Co. Brazil’s central bank faced a low economic growth forecast to 1.6%, and the employment rate was also down to 2.8% in May as compared to a year earlier.
Several officials said the tax needs a restoration in order to meet the fiscal savings goal for the current year. In addition, President DilmaRousseff\'s government showed some delay in the tax cuts made in 2012. The government plans to fine800 million Reaisin the tax revenue and extend its tax break for the auto industry foranothersixmonths, and 161 million Reaisin lost income of the furniture industry.