Brazil Bicycle Tax Curbs Purchases

By William Jones, Contributing Reporter

RIO DE JANEIRO, BRAZIL – Recently it was revealed that the tax levy on the purchase of bicycles in Rio is 40.5 percent, considerably more than the 32 percent threshold applied to cars. An average bike costs around R$400 in Brazil, making it 54 percent more expensive than in the United States.

According to economist Carla Rossi, a reduction of ten percent of bike prices could generate an immediate increase of up to fourteen percent in sales in Brazil. With a fairer price, she calculates that annual sales would potentially grow to 9.3 million units per year.

“With all the benefits of cycling [this high level of taxes] seems misplaced. The population has become aware, some cities are creating bike paths and lanes infrastructure, but there is still this tax issue,” said Marcelo Maciel, president of Aliança Bike (Bike Alliance).

Guilermhe Costa from GMX, a bicycle rental business based in Copacabana, echoed Ms Rossi’s sentiments by admitting that is the tax on the purchase of bicycles was lower he would be able to increase his fleet.

“I can say that if there was a lower tax rate for the purchase of bicycles in Brazil I could have a new fleet,” he told The Rio Times. “Unfortunately with the high cost, I can not make the purchase of new bikes every month,” he added.

Still, according to the Rio de Janeiro tourist board, the city is ranked among the top twenty in the world for the use of bicycles as transportation after beginning investment in the project in 1992. In a short space of time, the South American city’s reputation as a cyclist’s city has rocketed thanks to the construction of 200km of cycle lanes which are expected to be extended to 450km by 2014.

Cycling enthusiast and American expatriate in Rio, Bryan Sanders, told The Rio Times: “I bought a ‘Specialized Globe’ ladies bike for my wife here and it was about R$1,500 for a pretty normal single geared mom/city bike. It was still worth it. […] after the initial cost of buying here, riding pays off.

The most popular places for visitors to enjoy a bike ride in the city is along Copacabana and Ipanema beaches where there are dedicated cycle lanes to enjoy the scenic surroundings and calming cool breeze drifting off the beachfront, but it is not only on these iconic beaches where the opportunities end.

Another popular cycling path is the Lagoa, as well as the Aterro do Flamengo (Flamengo Park) which is linked to Botafogo beach, and then Copacabana through the tunnel Engenheiro Marques Porto.

For visitors, renting bikes is straightforward and Itau-sponsored bikes are part of the government’s Bike Rio project to provide better access to bicycles. The bright orange machines are unmissable and a user-friendly management system unlocks the bike from its stall through a simple phone call or smart phone app, offering almost unlimited access with the purchase of a monthly pass (R$10).