Brazilian Chamber Approves IPVA Tax Reform, Impacting State Revenues
On July 8, the Brazilian Chamber of Deputies approved a constitutional amendment proposal (PEC) to change the calculation of the Imposto sobre a Propriedade de Veículos Automotores (IPVA), a tax on vehicle ownership. The amendment, authored by Deputy Kim Kataguiri and reported by Deputy Rodrigo de Castro, aims to cap the IPVA rate at 1% of the vehicle's value, rather than basing it on market value. This change is intended to benefit all taxpayers by reducing the tax burden, but it is expected to negatively impact state revenues. Currently, the IPVA is calculated using the Fipe table, which reflects the average market price of vehicles in Brazil. The new calculation method would prevent the tax from increasing in line with inflation-driven vehicle price hikes. 
