Brazil's IPVA tax reform proposal approved by Chamber of Deputies

On July 8, the Brazilian Chamber of Deputies approved a constitutional amendment (PEC) to change how the Motor Vehicle Property Tax (IPVA) is calculated. The bill, authored by Deputy Kim Kataguiri (União‑Brasil‑SP) and reported by Deputy Rodrigo de Castro (União‑Brasil‑MG), would replace the current market‑value basis—largely derived from the Fipe price table—with vehicle weight as the primary criterion. The amendment also caps the tax at no more than 1 % of the vehicle’s sale price and allows states to grant discounts for lower‑emission vehicles.

If enacted, the new method would favor lighter cars, compact sedans and high‑value low‑weight models, potentially lowering their owners’ tax bills, while heavier SUVs, trucks and utility vehicles could face higher charges. Each state would need to issue regulations to implement the change, and the proposal is expected to reduce revenue for state governments that currently rely on IPVA collections based on market values.