The extension of the federal tax exemption for fuels would make ethanol less competitive compared to Gasolinewould affect the planning of plants that relied on the return of PIS/cofins in 2023 and would be an environmental and social “attack” against the population, said this Tuesday Evandro Gussi, president of Unica, a powerful association of sugar mill owners in the center-south of Brazil.
The speech came after the future finance minister, Fernando Haddadask the current government to let the exemption of federal taxes on fuelsas expected, after news that the current government had decided to extend the tax exemption for 30 days.
The extension would mean that gasoline would remain more competitive than ethanol, potentially leading mills to focus on producing sugar in the next harvest, as happened in the current season, when the government zeroed taxes as one of the measures to control inflation, after the spike in oil prices on account of the war in Ukraine.
If there is no extension of the exemption, the hydrous ethanol tends to gain competitiveness against gasoline, since it previously had a tax advantage. Reais were charged at 0.24 reais per liter for renewable fuel, while for gasoline the rate was 0.69 reais, said Gussi, who participated in the elected government’s transition team.
“I hope we are rational, I represent the ethanol sector, but the maintenance of exemption is harmful for Brazilian society”, said Gussi, in an interview with Reuters.
Although the exemption was expected to end in 2022, the 2023 Budget, approved by Congress last week, provides for the maintenance of the exemption next year, at a cost of 52.9 billion reais for the 12 months.
Of this total, the waiver of collection is estimated at 34.3 billion reais with PIS/Cofins and Cide on gasoline, ethanol and vehicle gas and at 18.6 billion reais with PIS/Cofins on diesel, biodiesel, liquefied gas and kerosene of aviation.
“There are needs for more fundamental things in Brazil. Are you going to renounce revenue by compromising economic sectors, compromising the poorest? This tax waiver does not benefit the poorest, ”she said, adding that these people in general do not have cars.
“That’s why I say it’s a social attack… it’s a political attack on the new government, the government that lost the elections wants to change the revenue of the incoming government… it’s an economic, environmental attack…”, he commented, citing the advantages of lower greenhouse gas emissions.
According to him, all the systems of the plants are already “parameterized” for the collection of taxes. “People who have always talked about legal certainty, predictability, Brazil as a safe haven for investment, then changing the rule that has been scheduled since July to end on December 31st?”, he asked, citing members of the current government.
Gussi also commented that exemption from fossil fuels no longer exists in the world, with the exception of “two or three totalitarian states”.
Source: Moneytimes
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