Brazil in September raised the so-called IPI tax on automobiles by 30 percentage points. The measure excluded cars with 65% local content, as part of a government effort to slow down auto imports that had flooded the market.
The September executive order said that the higher IPI tax went into effect immediately, but some car importers and opposition lawmakers said that Brazil requires 90 days before such a tax could go into effect.
The Supreme Court on Thursday agreed, saying that following the constitution, the measure could only go into effect in December.
Chinese carmaker Chery Automobile Co. in September was able to get a federal judge to suspend the higher tax for the company’s imports.
Before the tax increase in September, a Chinese Chery QQ with air-conditioning, power steering, air bags, CD player and electric windows cost 23,990 reais ($13,440) in Brazil, including import tariffs
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