BIG DEFEAT for Lula and Brazilian drivers will have to pay the price

The Federal Government published Provisional Measure (MP) 1163/23 which stipulates Return of PIS/Pasep and Cofins collection for petrol and alcohol sales by producers and importers.

Fuels have been taxed since this March. In summary, the price increase will be in effect until June 30, 2023.

Gasoline and spirits were exempt from taxation across the country until February 28, 2023.

By the way, there should be a new deputy growth approximately R$0.47 per liter of gasoline and R$0.02 per liter of ethanol, which may affect the price of products at gas stations.

Even with the return of tax collection for these products, the rates associated with the new taxation are lower than the taxes applied until the reduction imposed by the government of Jair Bolsonaro (PL) in 2022.

Similarly, the government claims it is seeking to avoid a sudden increase in the tax burden.

However, President Lula (PT) and his team hope to facilitate the return of fuel taxation, recovery and stabilization of the national economy.

By the way, the MP also postpones the withdrawal of CIDE investments for gasoline until June 30 of this year.

tax benefits

It is worth noting that the MP published by the Federal Government zeroes out PIS/Pasep and Cofins rates in respect of aviation kerosene (QAV) and vehicular natural gas (CNG).

It suspends both of these taxes in negotiations by refiners until the end of 2023.

Similarly, non-taxation in these cases and even limited refunds for certain gasoline and ethanol tax collections could result in a loss of up to $6.61 billion in revenue for the Federal Government.

To compensate for the losses, the deputy will tax the export of crude oil by 9.2 percent until June 30.

fuel prices

According to a study by the National Agency for Petroleum, Natural Gas and Biofuels (ANP), the average price of a liter of gasoline increased by an average of R$0.17 at service stations across the country with the return of federal taxes.

The contract price went from 5.08 roubles to 5.25 rupees.

The 3.35% growth was lower than the government’s expectation of Rs 0.34. dollars, and the market – 0.25 rubles.

Commercial ethanol rose by R$0.09, or 2.37 percent, to R$3.88 from R$3.79. The study took into account last week’s values ​​and was published on Monday (06/03).

Moreover, the return of fuel prices did not dramatically affect gasoline sales at gas stations.

It has about 27% anhydrous ethanol in its composition. Thus, the ANP survey revealed that the most expensive petrol in the country was found in Barueri (SP) at Rs 6.99 per litre.

Lower fuel prices

Last year, Jair Bolsonaro’s government sought to cut several taxes in an effort to curb inflationary pressures plaguing the country.

Thus, there has been a decline in IPI and ICMS on fuel and electricity. Because of this, there was also a significant decrease in recruitment.

This is due to the fact that tax reductions must be accompanied by a number of spending cuts.

Tax reform can also have a positive impact on the country’s growth. Current Finance Minister Fernando Haddad (PT) sought a way to offset tax losses.

With the new MP, the federal government aims to raise more than R28.4 billion by reloading petrol and ethanol and even maintaining zero rates on diesel.

If all fuel taxes were reinstated, the collection would reach 53 billion rials in 2023.

In conclusion, President Lula and his team sought a middle ground. They seek to secure greater collection by contributing to public accounts.

The government has also been careful not to increase the price of fuel sold at service stations. Its purpose is to curb inflation throughout the country.