Fuels: PIS/Cofins rate returns after June – 05/30/2023 – Market

The Lula government (PT) expects to resume the full collection of federal taxes on gasoline and ethanol from the end of June, said this Tuesday (30) the secretary of the National Treasury, Rogério Ceron.

An MP (provisional measure) edited at the end of February extended the partial exemption on these fuels for four months, a period that ends on June 30.

“At the end of the transition period, the full rate of reinstatement takes effect”, said the secretary at a press conference.

According to him, the current situation, with a reduction in oil prices on the international market and a “less tense exchange rate”, allows the government to go up one more step in the collection of taxes on fuels.

“The measures are in place,” stated Ceron. Even if there is some impact on prices, he assesses that the relief in other factors can balance the effect of the resumption of taxes. If implemented, the charge could generate a cash boost of R$ 22.3 billion.

In one of its first acts after taking office, the Lula government renewed the fuel exemption implemented by former President Jair Bolsonaro (PL). Initially, the benefit would be valid for two months, in the case of gasoline and ethanol, and until the end of the year, in the case of diesel and cooking gas.

At the end of February, the team of Minister Fernando Haddad (Finance) came under strong pressure, including from the PT, to renew the exemption. The solution was a kind of middle ground, with partial resumption of collection over a period of four months, which ends at the end of June.

Under current rules, taxation of gasoline and ethanol will resume in full from July 1st.

To offset the loss of BRL 6.6 billion with the partial re-encumbrance of fuels between March and June, Haddad announced a tax on oil exports, which would also be temporary.

“There is no intention to change or renew export tax,” said Ceron.

The secretary also stated that the government is still discussing measures to compensate for the reduction in tax rates on cars sold for up to R$ 120,000.

The Executive wants to encourage the purchase of these cars as a way to boost consumption at a time of economic slowdown. For this, the intention is to reduce the charges of IPI (Tax on Industrialized Products) and PIS/Cofins on sales, as well as IOF (Tax on Financial Operations) on financing.

Ceron avoided giving details about the negotiations, but stressed that Haddad has already signaled a duration of “3 or 4 months” for the program.

The impact on public accounts will depend on the final design, but he confirmed that there are scenarios in which the cost is between R$500 million and R$600 million, and others in which the bill may be “a little higher”.

As shown to Sheetthe government’s internal calculations indicate an impact of up to BRL 990 million, if the incentive is adopted for seven months —until the end of the year.

According to the Secretary of the Treasury, the government has been discussing solutions for the full compensation of amounts, although the LRF (Fiscal Responsibility Law) waives the adoption of measures in this sense for regulatory taxes (such as IPI and IOF).

“The objective is full compensation, so that there is no change in the fiscal result”, he said.