It has been published on 24 October 2011 that the tax hike proposed by the Brazilian government on the manufacture of foreign cars has been suspended. The Brazilian Supreme Court has ruled the planned tax increase to be unconstitutional due to its rapid implementation.
The government has proposed up to 30% increase in the industrial products tax (IPI) for cars that are manufactured predominantly from foreign components and they want it to be effective immediately. But Brazilian law demands a 90-day notice period before the tax change can be administered. The IPI alteration, therefore, was proposed to be effective from mid-December.
