Brazil Imposes New IPI Tax on Motorcycles, Microwave Ovens & Split Air Conditioners

KUALA LUMPUR, July 4 (Bernama) -- The Brazilian government has revised its Industrial Product Tax for imported motorcycles, microwave ovens and split air conditioners, raising the duty by 35 per cent from October, a move Malaysian manufacturers of high quality products can capitalise on. Notwithstanding price increases, it is expected that sales of these imported goods will not diminish substantially due to demand from the higher income, affluent groups with higher purchasing capacity. The Malaysia External Trade Development Corporation (Matrade) contends that Malaysian manufacturers might therefore be able to capitalise on these three items with the supply of higher priced, better quality and exclusive products. New investors would do well taking into consideration the new import procedures and tariffs to ensure they are able to capitalise on their investments, the national trade promotion agency said in a statement on Wednesday. The Brazilian government hiked taxes for these three items following requests by their manufacturers to reduce competition from foreign products emanating primarily from Asia and Europe and for whom these imports impact substantially on their bottom lines. Retail prices of these imported items are expected to rise between 10 and 15 per cent. The announcement has drawn expected resistance from Brazilian importers as it will mean an increase in retail prices of these goods. Currently, the main exporters of motorcycles into Brazil are China with US$62.580 million last year, followed by Japan, Germany, Italy and Austria. Total global export of motorcycles into Brazil amounted to US$156.544 million in the same year. Microwave ovens exports amounted to US$64.693 million globally in 2011, again China leading the pack at US$61.962 million. China is also Brazil´s largest supplier of air conditioners with a total of US$476.722 million out of a total global volume of US$705.311 million. Other suppliers are the United States at US$56.342 million, Japan at US$35.310 million, Italy at US$25.445 million and Thailand at US$23.093 million. -- BERNAMA