General Motors is in talks to invest 9 billion reais ($2.5 billion) in the Brazilian state of Sao Paulo over the next three years in return for tax obligation rewards, newspaper Valor Economico reported on Friday.
GM has in latest weeks advised its staff members in Brazil that “sacrifices” would certainly be essential for the company to return to profit in the nation, raising issues regarding layoffs or shuttered assembly lines. Last month, the automaker told public officials as well as unions it was in talks with Sao Paulo state about tax rewards.
Valor reported that GM would invest in its product until 2022, and afterwards the following year, the company would begin to enjoy tax refunds. Valor, which also reported that GM’s losses in Brazil last year amounted to 1 billion reais in spite of being the nation’s market leader, did not specify the specific amount GM would certainly expect to produce in tax rewards.
GM refused to comment.
In 2017, Brazil’s government granted automakers a 15-year plan of tax breaks– expanding aids for an industry that has had a hard time to compete straight with production elsewhere despite high import obstacles.
Economy Minister Paulo Guedes, that took workplace as part of a new business-friendly federal government this month, has said Brazil can not afford to keep subsidizing powerful sectors, suggesting that an end to protectionist policies will certainly make the economy situation much more competitive.