Brazil to extend tax discount on car sales -report
BRASILIA, June 27 (Reuters) - Brazil's government will extend a tax discount on car sales beyond next month in the latest attempt to help a key industrial sector and avoid job losses, a local newspaper reported on Friday.
The IPI tax on automobiles will remain at its current reduced levels for an indefinite period beyond July 1, when it was scheduled to go up, Valor Economico said.
A Finance Ministry spokesman was not immediately available to comment on the report.
Brazil is a key base of operations for automakers that include Italy's Fiat SpA, Germany's Volkswagen AG and U.S.-based General Motors Co and Ford Motor Co.
Global carmakers, whose local factories account for a fifth of Brazil's industrial output, have been furloughing workers and offering buyouts as they struggle with excess capacity and plunging consumer confidence. Employment in the industry was down 2.8 percent in May from a year earlier.
The tax discount extension is the latest in more than two dozen failed attempts over the last three years to strengthen Latin America's largest economy, which has suffered with high labor costs and falling business confidence.
Earlier this month, Brazil announced measures including subsidized lending and tax credits to exporters of manufactured goods. Previous tax cuts and cheap loans have reduced tax revenues, leading the country to miss key fiscal goals in 2012 and 2013. (Reporting by Silvio Cascione; Editing by Lisa Von Ahn)
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