Government negotiates PEC to lower electricity and gas bills

The authorities’s proposal to zero gasoline taxes would scale back federal income by about R$50 billion

President Jair Bolsonaro (PL) mentioned yesterday that he’s negotiating with Congress a Proposal for an Amendment to the Constitution (PEC) to cut back the worth of gasoline and electricity later this 12 months, during which he plans to run for reelection.

“We have a Proposal for an Amendment to the Constitution, which is being negotiated with the Chamber and the Senate, in order that we will cut back, or fairly, have the potential of virtually zeroing gasoline taxes, PIS and Cofins. So, it’s a risk,” Bolsonaro mentioned throughout a stay broadcast on social media.

The authorities’s proposal to eradicate gasoline taxes would scale back federal income by round R$50 billion, in accordance to a member of the financial crew interviewed by Estadão. PIS/Cofins charges on gasoline, diesel and ethanol can be zeroed. The affect for the patron, nevertheless, can be small: discount between R$ 0.18 and R$ 0.20 within the worth of a liter of gasoline.

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Including the exemption from federal taxes (PIS/Cofins) levied on the electricity invoice, the loss in income might attain R$ 57 billion and even higher. According to Bolsonaro, who didn’t give particulars of the proposal, the PEC would give “reduction” to customers. “Although the difficulty of inflation is occurring everywhere in the world.”

The Fiscal Responsibility Law (LRF) requires the federal government to offset the impact on income by decreasing one tax by elevating one other. The PEC can be a means to circumvent this requirement and additionally permit governors to exempt the Tax on the Circulation of Goods and Services (ICMS) without compensation, however, in accordance to technicians heard by the report, the approval of a complementary regulation can be sufficient to waive the requirement on this case. Technicians from the financial space are in opposition to the proposal as a result of it’s too costly in fiscal phrases for a small discount in gasoline prices.

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According to Estadão, the Minister of Economy, Paulo Guedes, isn’t opposed to the measure, headed by the Senate. The head of the negotiations is the federal government chief in Congress, Senator Eduardo Gomes (MDB-TO). Guedes, nevertheless, was in opposition to the idea of ​​making a stabilization fund to dampen fluctuations in gasoline prices.

This week, after being requested by the president of the Chamber, Arthur Lira (Progressistas-AL), the president of the Senate, Rodrigo Pacheco (PSD-MG), mentioned that he intends to information a venture to cut back the impacts of the rise in fuels. According to him, the subject might be submitted to the leaders of the House in February.


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Lira criticized the place of governors and mentioned that calls for on the topic want to be addressed to the Senate. The governors ended the ICMS freeze on fuels. Lira labeled the choice as electoral and mentioned that the governors accuse the Executive and Congress “to create a smokescreen”.

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uncomfortable

Pacheco cited a venture by the PT bench as a proposal to cut back gasoline prices. The Chamber accredited a venture that adjustments the ICMS assortment mannequin and obtained criticism from governors and senators.

There is a normal unease within the political class in relation to the worth of gasoline on the similar time that Petrobras has one of many largest income among the many oil corporations. This week, the Administrative Council for Economic Defense (Cade) opened an investigation to examine “attainable abuse of a dominant place by Petrobras within the gasoline market”. The state has till at this time to present clarification.

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