DJ Rousseff: Higher Auto-Import Tax Needed to Protect Brazil Jobs -TV
29-Sep-2011
SAO PAULO (Dow Jones)--Brazilian President Dilma Rousseff said Thursday that the country's higher tax on imported cars is needed to protect jobs in the country as automakers seek to benefit from growing consumer demand.
"Whichever company that wants to come to Brazil, if they don't want to pay the higher tax, they have to produce here," Rousseff said in an interview broadcast on the Rede Record network. "It's not possible to assemble CKD (cars from imported parts) and sell the product here. I don't have an obligation to create jobs out there."
Rousseff said that foreign companies have taken advantage of Brazil's auto sales growth, pointing to the more than 20% of car sales that come from imports. She said that Brazil will no longer be "used" by these companies and that they will have to produce parts locally to benefit from the market's growth.
The government this month boosted by 30 percentage points a tax on auto sales, but said companies that produce 65% of autos locally and reinvest a part of revenue in local research and development centers would be exempt from the higher tax.
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The exemptions also include autos made in Mexico and members of the Mercosur trading block.
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