123 Tax reform is about to profoundly transform the business environment in Brazil, and one of the sectors that will most feel this impact will be road transport implements, with Value Added Tax (VAT) rising to over 28%, up on its current 19.5% (PIS and Cofins taxes in Brazil). This will not only raise the costs for transport companies but will also impact on the entire road implement production chain, which produces parts and essential inputs for cargo transport. The sector, which already faces rising operating costs and high tax rates, will need to deal with a new tax model that could drastically affect its competitiveness. What many companies have not yet realized is that, without efficient tax planning, the impact of the reform may be even greater. A tax increase is not a possibility, it is an imminent reality. The question is whether your company is prepared to absorb this impact. Road transport implements play an essential role in the country’s logistics infrastructure, ensuring that goods are transported safely and efficiently. However, tax reform may compromise the renewal of the fleet, make operations more expensive, and reduce the competitiveness of companies in the sector. Among the major impacts of tax reform on the sector are: • Increases equipment costs – The higher tax burden on the manufacture and sale of implements could make it difficult to renew the fleet, increasing the costs of cargo transportation. • Reduced profit margins for transport companies – With the increase in taxes, transport companies may find it difficult to pass on costs, becoming less competitive in the market. • More expensive freight and final product prices – Cargo transport is one of the main drivers of the economy. An increase in logistics costs cascades to product prices, affecting the entire production chain, and end consumers. In addition, the transition phase for tax reform may lead to insecurity and complexity, as companies will have to deal with old and new taxes simultaneously, which could increase the risk of tax errors and penalties. Faced with a scenario of uncertainty and a high tax burden, the best strategy for companies in the road transport implement sector is to structure efficient tax planning, which includes: • Detailed analysis of the impacts of the reform – Each company has a specific tax profile, which requires a complete survey to understand the challenges and opportunities involved. • Identification of opportunities to reduce the tax burden – There are legal and strategic ways to mitigate the impacts of the new rate and ensure a better tax structure for each business. • Recovery of tax credits – Tax planning can identify opportunities for offsetting and recovering taxes, reducing unnecessary costs. • Customized strategies to face the transition – Structuring a more efficient tax model to get through the transition phase of the reform without surprises. Tax reform is inevitable, but the increase in costs does not have to be. Companies that invest in tax planning and adopt mitigation strategies will have a significant advantage over the competition. The time to act is now. Do not wait for the new tax burden to kick in before seeking solutions. The sooner your company is structured, the greater the chances of minimizing impacts and maintaining competitiveness in the market. Tax reform is the challenge now! Well-structured planning reduces impacts and boosts competitiveness By José Carlos Cardoso Antunes, member partner and Luis Wulff, CEO and founding partner of Tax Group
RkJQdWJsaXNoZXIy NDU0Njk=