The Temporary Tax on Oil Exports Has Generated Dissatisfaction in Several Sectors of the Brazilian Market, Especially in the Oil and Natural Gas Industry.

With the aim of questioning the 9.2% rate that was created as a Export Tax on operations that send crude oil abroad, the Brazilian Association of Oil and Gas Exploration and Production Companies (ABEP) proposed a direct action of unconstitutionality (ADI) that has as its main objective the suspension of the tax. Now, the Federation of Industries of Espírito Santo (Findes) has entered as amicus curiae in this same action.

Effective from March 1st to June 30th, the temporary tax collection was created by Provisional Measure (MP) 1.163/2023 in order to compensate for the revenue losses from the partial tax exemption on gasoline and ethanol, which extended until the end of June. From the beginning, the tax collection has generated many criticisms, since it is an export tax, which is not common in the market. This situation has raised concerns about legal uncertainty in other sectors related to international trade, such as agriculture and mining.

Brazilian Association of Oil and Gas Exploration and Production Companies Proposes Direct Action of Unconstitutionality

In this context, the Findes is one of the institutions that sees the temporary tax as a factor that increases legal instability in the sector and reduces the competitiveness of the national oil industry in attracting investments. With the action as amicus curiae, Findes aims to reinforce this argument before the Federal Supreme Court (STF).

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In addition to Findes, other institutions have also entered as amicus curiae in the ADI, such as the National Confederation of Industry (CNI), the National Organization of Oil Industry (Onip), the Federation of Industries of Rio de Janeiro (Firjan), the Government of the State of Rio de Janeiro, the Organization of Oil Producing Municipalities (Ompetro), and the City Hall of Macaé (RJ).

Findes Enters as Amicus Curiae in the Action and Reinforces Argument Against the Tax Collection

The president of Findes, Cris Samorini, believes that the creation of specific taxes on oil that affect the entire product value, regardless of profitability, changes the risk perception in the Brazilian oil industry.

With this new tax, Brazil begins to lose investment attractiveness due to the legal uncertainty caused by the arbitrariness in changing specific taxes. This measure has a negative impact on planned or ongoing investments, generating a lack of legal security.

The oil exports are the third most important item in the Brazilian trade balance, accounting for a surplus of US$ 65 billion in the last four years. In Espírito Santo, the oil and natural gas industry exported, in 2022, US$ 1 billion, a value that represents 1.7% of the sector’s external sales in the country and 11.4% of the total external sales of the State.

Temporary Tax May Affect the Competitiveness of the National Oil Industry in Attracting Investments

Findes’ position regarding the ADI reflects the concern about the impact of taxation on the oil and gas industry in Brazil, since, with the continuation of the temporary tax collection, the competitiveness of the industry will be affected.

It is important to remember that the final decision on the suspension or not of the 9.2% temporary tax on crude oil exports will be up to the Federal Supreme Court, but Findes’ participation as amicus curiae may provide important information and help in forming a more careful and balanced decision.