Sao Paulo to offer tax incentives to automakers

by SpeedLux
Sao Paulo

Brazil’s Sao Paulo stated on Friday it would provide fresh tax incentives to automakers, weeks after Ford Motor stated it would close a plant there with 3,000 workers and General Motors hinted it might do the same before backtracking.

Sao Paulo is the historical center of Brazil’s automobile industry, that was one of the world’s five biggest until a latest downturn from which it is still recovering. It has been losing ground in latest years to other Brazilian states which have showered automakers with incentives.

Sao Paulo state Governor Joao Doria stated during a press conference that the state would provide a discount of up to 25 percent over Brazil’s ICMS value-added tax to automakers that invest no less than 1 billion reais ($258.78 million) and generate 400 new jobs.

Doria stated that the government is still attempting to help sell Ford’s factory located in Sao Bernardo do Campo, that is scheduled to be closed by year’s end. He added the state is negotiating with three companies, which he did not mention.

He did not stated when the incentives would take effect. Legislative approval is not needed.

Ford refused to comment, while General Motors stated the incentives would help as the industry seeks to be more competitive.

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