If approved, the Biofuels PEC, which is part of the package of projects aimed at containing the rise in fuel prices, will be valid for at least 20 years

Unanimously, the Senate approved yesterday (14/06) the Proposed Amendment to the Constitution (PEC) 15/2022, which encourages the competitiveness of biofuels in relation to fossil competitors, and which aims to maintain the differentiation of the tax burden of ethanol in relation to gasoline. The text maintains benefits for clean energy sources for at least 20 years.

There were 68 votes in favor and none against in the first round vote. In the second round, 72 votes were in favor and none against. The matter goes to the Chamber of Deputies.

Watch the video below and understand how the PEC can help contain the rise in fuel prices

The PEC is part of a package of projects aimed at containing the rise in fuel prices. On Monday (13), the Senate approved the project that sets a ceiling of 17% of ICMS on fuel, electricity and telecommunications and public transport services (PLP 18/2022).

On the initiative of Senator Fernando Bezerra Coelho (MDB-PE), PEC 15/2022 provides for the creation of “a favored tax regime for biofuels”, which will be defined in a complementary law to be approved by the National Congress. According to the PEC, the rates on renewable sources must be lower than those provided for fossil fuels. The senator highlighted that the text “does not innovate, it just maintains the existing benefits” for clean fuels.

Biofuels PEC, which aims to maintain the differentiation of the tax burden of ethanol in relation to gasoline.

—  We need to maintain the attractiveness for ethanol. Today, we have a tax difference between gasoline and ethanol. The PEC is merely a constitutional command to maintain the current tax structure - declared Bezerra.

The rule must be valid for at least 20 years and will be applicable to the following taxes: Contribution for the Financing of Social Security (Cofins) paid by the company on revenue or billing and by the importer of goods or services from abroad; Contribution to the Programs for Social Integration and Building Assets for Civil Servants (PIS/Pasep) and Tax on Circulation of Goods and Services (ICMS).

While the complementary law does not come into effect, the competitive differential of biofuels in relation to fossil fuels will be guaranteed by maintaining, in percentage terms, the difference between the rates applicable to each fossil fuel and the biofuels that are substitutes for it, at an equal or higher than that in force on May 15, 2022.

When the competitive differential is not determined by the rates, it will be guaranteed by maintaining the effective tax burden differential between fuels.

“The amendment now presented, thus, seeks to enshrine in the Constitution the competitive structure of biofuels that compete directly with fossil fuels in the country, maintaining an effective and fair tax differential between these products. It also strengthens Brazil's strategic position to take advantage of the opportunities outlined by the low-income economy. carbon“, justified Bezerra when presenting the PEC.

-by Agência Senado