Brazil extends tax break for auto industry until year end

SAO PAULO, June 30 Mon Jun 30, 2014 4:31pm EDT

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SAO PAULO, June 30 (Reuters) - The Brazilian government will extend a tax break for automakers, Finance Minister Guido Mantega said on Monday, in a bid to help raise sales depressed by a slowing economy in the world's No 4 car market.

The announcement marks a change in policy for the government which until recently said it would let the tax break expire and restore the tax on manufactured goods, or IPI, for car sales to previous levels to safeguard its fiscal accounts.

"This measure will stimulate the sector so that jobs can be kept even when sales are down," Mantega told reporters in Sao Paulo.

The IPI tax for automobiles will remain at its current reduced levels until the end of the year. The tax break was suppose to end on July 1.

Brazil is a key base of operations for automakers that include Italy's Fiat SpA, Germany's Volkswagen AG and U.S.-based General Motors Co and Ford Motor Co. (Reporting by Aluisio Alves; Writing by Alonso Soto; Editing by James Dalgleish)

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