The Latin American Association of Automobile Distributors said that the initiative is a significant step forward for the automotive sector.
The Latin American Association of Automobile Distributors (Aladda) welcomed the Argentine government's decision to reduce the internal tax burden on cars and motorcycles. The measure was announced on January 28.
According to the Argentine Minister of Economy, Luis Caputo, on the social network X, that country will eliminate internal taxes for mid-range cars, which will impact on a reduction in the sale price of between 15% and 20%, with the aim of boosting market demand.
The measure will come into effect next week and will affect cars costing between 41 and 75 million pesos (US$39,000 and US$71,300), which until now paid a 20% tax, while the tax for cars costing more than 75 million pesos will be reduced from 35% to 18%.
For its part, Aladda, chaired by Genaro Baldeón, who is also executive president of the Association of Automotive Companies of Ecuador (Aeade), urged that these tax reduction policies be consolidated and expanded in Latin America, generating a more accessible, dynamic and sustainable automotive market for the benefit of consumers and economic growth.
Baldeón pointed out in his X account that reducing taxes on vehicles is key to boosting growth, facilitating mobility and modernizing the vehicle fleet with new technologies. “At Aladda we continue to work towards a more competitive and efficient market.”
In Ecuador, for example, vehicles can have a tax burden of up to 96%, which represents almost double the price of a vehicle at the port, according to figures from Aeade. In the country, the following are charged: Tax on the exit of foreign currency (5%), Development Fund for Children (0.5%), Tariff (28%), Value Added Tax (15%), Tax on special consumption (from 5% to 35%), Tax on road traffic (US$ 25) and the Tax on the ownership of motor vehicles.
Ecuadorian automotive sector unions have repeatedly urged authorities to lower the tax burden on vehicles. In 2024, sales of new vehicles in Ecuador fell by almost 19%, according to figures from Aeade.
Meanwhile, Aladda added that in line with the drive to modernize the vehicle fleet, the measure also includes the elimination of tariffs for the import of electric and hybrid cars. “At Aladda, we believe that this initiative represents a significant advance for the automotive sector and citizens, by facilitating access to more advanced and affordable technologies. In addition, it contributes to improving Argentina's competitiveness within the region, promoting a favorable environment for the development of the industry,” the association said in a statement on Wednesday, January 29.
