RN lowers ICMS rate on ethanol price

The State Department of Taxation of Rio Grande do Norte (SET-RN) will reduce to 15.33% the rate of Tax on Operations related to the Circulation of Goods (ICMS) applied to the fuel price of hydrated ethyl alcohol, ethanol. The move aims to make biofuel more competitive against fossil fuels and lower the final price consumers pay for the product at the pump.

The new tax calculation base will be established by decree, which will be published in the Official State Gazette.DOE) this Saturday (30) and will take effect retroactively to July 15.

The text regulates in the state the provisions established by Constitutional Amendment number 123/2022, which was approved on the 14th of this month, in order to make ethanol more competitive throughout the country with prices below the value of gasoline. The constitutional amendment provides for the transfer to the states of up to R$ 3.8 million to maintain the competitiveness of hydrated alcohol against petroleum-derived fuels through tax credits.

With this measure, the tax rate will decrease from 18% to 15.33% in Rio Grande do Norte. As of July 1, the SET-RN had already reduced the ICMS, levied on fuel, electricity and telecommunications, to a base rate of 18%. The decrease was implemented to adapt the calculation of the tax in the RN to the guidelines of the Complementary Law 194/2022, approved by the National Congress and sanctioned on June 23, making these items essential.

As a result, the ICMS tax rate for ethanol fell from 23% to 18%, and with the entry into force of the state decree, the calculation base is again reduced to 15.33%, representing a total decrease of 7.67% percentage points. . The move is expected to bring down pump prices and boost the sugar and alcohol sector in the state.

According to experts, the use of ethanol is more economically advantageous than gasoline when the price of the former is up to 70% of the value of gasoline. In the most recent ANP survey, the average price of ethanol in Rio Grande do Norte is R$5.78, while that of gasoline was R$6.35. With gasoline at that price, the price of ethanol should be R$4,445 to be more favorable.

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