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Changes in fuel prices in recent months have worried millions of Brazilians who depend on these products to work or travel, and the fuel exemption is the chance for prices not to rise.
Os oil prices skyrocketed in the first months of last year, prompting the federal government to take drastic measures. One of the main decisions was to limit the rate of the Tax on Circulation of Goods and Services (ICMS), which also includes other essential services such as electricity, gas, telecommunications and public transport. Therefore, the maximum that a state can charge for ICMS is 18% with exemption on fuel.
Before the measures, some federation units had rates of up to 30%. Another very important measure is the elimination of federal taxes such as PIS/Pasep and Cofins. The campaign caused a drop of 25,8% in the price of gasoline at the end of last year, according to the Brazilian Institute of Geography and Statistics (IBGE).
Postpone the fuel exemption
Shortly after taking office as President of the Republic, Luiz Inácio Lula da Silva signed a provisional measure extending the fuel exemption until the end of February. If not extended, the exemption will expire in December. Meanwhile, Finance Minister Fernando Haddad's team is assessing the impact of the tax decision on public accounts. By waiving taxes, the league loses a lot of revenue.
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Effective date The extension approved by Squid already have a deadline. Exemption from PIS/Pasep and Cofins rates for diesel, biodiesel and LPG continues until December 31, according to a document signed on January 2. With regard to gasoline, the exemption will last until February 28. Cide zero also has the same expiry date as the maintenance of the product.
Reinstatement of fuel exemption
Earlier this week, Haddad announced a fiscal plan to restore public accounts and reduce a projected deficit of 231,5 billion reais this year. One of the planned measures is the refund of the federal tax on gasoline. Although the minister revealed the portfolio's intentions, it is up to President Lula to decide on future tax exemptions. The decision must still be evaluated by the PT team, which must choose between maintaining the fiscal deficit or deteriorating Brazilian income.
Exemption on fuel already comes from the Bolsonaro government
The president Jair Bolsonaro approved, without veto, complementary law nº 192/22, which provides for the Tax on Circulation of Goods and Services (ICMS) on fuels, including imported ones, based on a fixed rate per sales volume. New laws are published in a supplement to the Official Gazette.
In addition to the changes in the main state tax, the ICMS, the text also changes the federal PIS/Pasep and Cofins, requiring fuel exemption from 2022. The norm comes from the replacement of the Complementary Law Project (PLP) 20/11 by Deputy Emanuel Pinheiro Neto (PTB-MT) approved by the Senate last week. The new standard covers gasoline, fuel alcohol, diesel, biodiesel and liquefied petroleum gas, including natural gas derivatives. Aviation kerosene is excluded.
