Partial victory – 03/01/2023 – Opinion

Luiz Inácio Lula da Silva (PT) got the essentials right by promoting the return of federal taxation on gasoline. The victory of the Minister of Finance, Fernando Haddad, and of economic rationality was tarnished, however, by a silly measure that reveals how much archaic ideas of the continental left find shelter in the government.

This Wednesday (1st), the collection of PIS and Cofins at BRL 0.47 per liter of gasoline and BRL 0.02 per liter of ethanol began, ending the zero rate instituted by Jair Bolsonaro (PL) in last year’s voter vale-tudo.

The tax subsidy was socially unfair, as it mainly benefited the most affluent part of the population, who owned cars. Even so, the PT command and the government’s political wing worked for his permanence, concerned with the presidential popularity in the short term.

As a result, the re-encumbrance of fuels did not take place at the amounts previously in force, of BRL 0.69 for gasoline and BRL 0.24 for ethanol —which would frustrate the goal announced by Haddad of raising BRL 28.9 billion to reduce the huge fiscal gap foreseen for this year.

To get around the problem, resorted to a kludge of the worst kind. The Executive decided to charge an Export Tax (IE) of 9.2% on crude oil sales abroad for four months.

There are errors of different kinds in fabrication. For starters, the almost unknown IE wasn’t designed to earn revenue. Its purpose is to regulate the market in very peculiar situations. In the whole of last year, he amassed a measly R$ 5 million.

Using it to obtain R$ 6.7 billion in a four-month period is an excrescence that will harm operations in the productive sector, starting with Petrobras. It creates insecurity regarding the rules and the risk of judicialization —not to mention the not inconsiderable possibility that the charge ends up being maintained for an indefinite period.

Taxing exports on a large scale is avoided in the world. A disastrous example can be found in neighboring Argentina, in a chronic fiscal and inflationary crisis.

Finally, it is a precarious and misleading budget fix. To reinforce its coffers, the government extracts money from its largest state-owned company through a so-called temporary tax, driven by immediate political convenience and, at worst, by ideological obsessions against the export of primary products.

A responsible Congress should maintain the re-encumbrance of fuels without the bizarre taxation of sales abroad. Fiscal rebalancing, imperative for combating poverty and inequality, needs stable foundations.

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