The bill authorizes a reduction to 3% in the ICMS calculation base on operations for the extraction and production of oil and natural gas in Rio de Janeiro

Project that changes the oil taxation regime will have a new version. The Taxation, Budget and Economy commissions of the Legislative Assembly of the State of Rio de Janeiro (Alerj) analyzed, yesterday (02/06), the 42 amendments presented to bill nº 1771/19. Brazil remains consistent and closes April with daily production of 2,958 million barrels of oil

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Bill No. 1771/19 authorizes a reduction to 3% in the ICMS tax base on operations for the extraction and production of oil and natural gas in Rio de Janeiro

The discount refers to the acquisition in the domestic market or the importation of goods or merchandise from abroad by companies holding an onerous assignment, a sharing agreement and a concession or authorization to carry out oil and natural gas exploration and production activities in Brazil. .

According to the chairman of the taxation commission and one of the authors of the bill, deputy Luiz Paulo, the bill was first presented to deputies in the third quarter of 2019, when agreement 220/19 of the National Council of Finance Policy (Confaz) – which defined new rules on the exemption and reduction of the ICMS calculation base in operations for oil exploration and production, including amendments to Agreement 3/18, which also dealt with the subject within the Special Customs Regime of Export and Import of Goods Destined for Oil and Gas Production Activities (Repetro).

Luiz Paulo also reiterated that the project advances on three fronts. “With it, we changed the taxation at the destination. We also removed the zero rate from national companies and, now, they would pay 3%. In addition, there will be no credit under any circumstances. These are the three significant advances that we propose with this text,” explained the congressman.

Liuz Paulo also says that 80% of the companies that explore the pre-salt in Rio de Janeiro are outside Rio de Janeiro and only 20% of the productive chain settles in the state, which, on the other hand, produces more than 75% of the national oil .

exploration of oil in Rio January

The president of the House, deputy André Ceciliano, stressed that the state of Rio de Janeiro needs to have a differentiated ICMS percentage. “80% of the pre-salt layer is in Rio, 12% in São Paulo and 8% in Espírito Santo. It is not fair that our profit is not proportional to our exploitation. We also have to take into account that it is much better to produce in the pre-salt layer, given that the world's largest companies are in the pre-salt layer, than to produce in Saudi Arabia, which is the only place that has a lower cost than in the Brazil, but there is the risk of transportation”, concluded the parliamentarian.