Mover provides incentives for car manufacturers that invest in research and contribute to the decarbonisation of the car, bus and truck fleet
BRASILIA – The federal government presented the first rules of the Green Mobility Program on Tuesday 26th (Move), launched in December by the presidential administration Luiz Inácio Lula da Silva replacing Rota 2030. Companies that produce automotive products in the country and develop research services in Brazil can benefit from the program.
Mover provides, among other measures, financial credits for those who invest in technological research, development and production that contribute to the decarbonisation of car, bus and truck fleets.
This first ordinance regulating the program provides, among other things, a minimum expenditure on research and development (R&D), an investment monitoring system and sanctions in case of failure to comply with obligations.
The program requires automakers to make a minimum investment in research and development in relation to the total gross revenue from the sale of goods and services related to automotive products. The percentages vary depending on the type of vehicle.
For light commercial vehicles, for example, the minimum percentage of gross revenue to be eligible for tax credits starts at 1% this year and gradually increases, reaching 1.8% in 2028.
Initially, however, the requirement will be lower than the minimum required by the latest automotive programme, in force until the end of last year (Rota 2030). The minimum investment percentage required in 2023 was 1.2% of gross revenues.
The government recognizes that the new program starts from a lower level than exists today and claims that this is necessary so as not to jeopardize the entry of new investments in the future. Even lower, for the government, the level is higher than that requested at the start of Rota 2030 in 2018, equal to 0.5%.
The Mover also provides for the creation of the National Fund for Industrial and Technological Development (FNDIT), whose resources must be allocated to priority programs for the auto parts sector and other links in the automotive chain.
This year the government reserved R$3.5 billion from the Budget to offer tax exemptions to the automotive industry, a value that will reach R$ 19.3 billion by 2028. Last week the federal administration sent the bill establishing Mover to Congress. The PL replaces Provisional Measure 1.205. The Mover MP was published at the end of December, but the joint commission to evaluate the measure has not yet been established in Congress.
In the monitoring part of the qualification, the Government establishes that the qualified company must submit a monitoring report annually by 31 July of the following calendar year. The license is valid until January 31, 2029.
Failure to comply with additional requirements, commitments, conditions and obligations may result in retroactive cancellation of the license or suspension of the license.
According to the government, in the coming weeks decrees and ordinances will be published that will define the IPI Green tariffs and which will establish mandatory parameters for the sale of new cars produced in the country or imported, in relation to energy efficiency, vehicle labeling, recyclability and safety.
Bonds
Also during Tuesday’s ceremony, a decree was signed regulating the issuance of “infrastructure bonds” and “incentive bonds”.
The decree establishes criteria for the classification and monitoring of investment projects considered priorities in the sector of infrastructure or intensive economic production in research, development and innovation. This defines the initiatives that may have financing driven by the new bonds, which will have a tax incentive.
Infrastructure bonds arrive on the market in a complementary way to the already known “incentivized bonds”, also regulated by the new decree. The federal government states that the text maintains its commitment to fiscal balance, “so that the changes promoted by the new decree, in addition to giving an environmentally sustainable character to the proposal, better focus public policy and preserve the fiscal sustainability of the State”.
One of the innovations envisaged by the new decree is the reduction of bureaucracy in accessing the financing mechanism, maintaining the federal government’s ability to manage the advancement of public policies. In this sense it is no longer necessary to publish a ministerial order before approving projects, but it is up to the project owner to ensure that it meets the requirements established by the decree.
For buyers, infrastructure bonds yield interest and monetary correction. For issuers, the lower cost financing source also allows the deduction of interest paid based on income tax and social contribution on net profit (CSLL).
The money raised from the bond issue must be allocated to investment projects in infrastructure or intensive economic production in the field of research, development and innovation.
Source: Terra
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