Brazil to suspend diesel tax; sources say bank tax to be hiked

Brazilian President Jair Bolsonaro said he would issue a decree on Tuesday suspending a tax on diesel fuel, a move aimed at placating truckers who threatened to strike, while sources told Reuters the government would hike taxes on banks to offset lost revenue.

Reuters | Updated: 02-03-2021 06:59 IST | Created: 02-03-2021 06:59 IST
Brazil to suspend diesel tax; sources say bank tax to be hiked

Brazilian President Jair Bolsonaro said he would issue a decree on Tuesday suspending a tax on diesel fuel, a move aimed at placating truckers who threatened to strike, while sources told Reuters the government would hike taxes on banks to offset lost revenue. In a video posted to social media on Monday, Bolsonaro said the decree would suspend both the so-called PIS/Cofins tax on diesel and taxes on cooking gas for two months.

"The decrees should be published early tomorrow to zero cooking gas federal taxes and PIS/COFINS for diesel for 2 months," he said. The president acknowledged the government would need to compensate for the lost revenue in another way, without specifying how.

"We'll have to take it out of somewhere." Two people with knowledge of the matter, who spoke on condition of anonymity, said the government planned to raise a tax on banks' net income to about 23% from 20% to make up for the lost revenue.

Shares in Brazilian banks fell on Monday afternoon after the newspaper O Globo first reported the shift in tax policy. The government is also planning to end some tax exemptions for vehicles and petrochemical products, the newspaper said. Bolsonaro had promised a reduction in diesel prices by cutting federal taxes on the fuel, following threats that truckers would go on strike. That would cost 3.6 billion reais ($640 million) this year.

Bolsonaro's office directed questions on the possible banking tax hike to the Economy Ministry, which did not reply to a request for comment. Shares in the largest banks extended losses in late afternoon after the O Globo report. Preferred shares in Itau Unibanco Holding SA closed down 3% at 24.90 reais, and preferred Bradesco shares lost 3.3% to 22.24 reais. Units in Banco Santander Brasil fell 1.2% to 37.09 reais.

($1 = 5.6228 reais)

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)


TRENDING

OPINION / BLOG / INTERVIEW

Viral variants and vaccine nationalism pose two-pronged threat to Covid victory

... ...

Tracking Fintech during COVID-19: Harnessing power of technology

Its abundantly clear now that as fintech cements its place in the financial sector, accelerated further by the COVID-19 pandemic, it could open the sector to new possibilities by harnessing the power of technology to deliver financial ...

Tectonic turns: How technology shaped healthcare over the decades

Tracing an episodic evolution, with technology at the interface of human and his health....

World Water Day sees crises of inequality in countries both rich and poor

... ...

Videos

Latest News

Yogi Adityanath tests positive for COVID-19

Uttar Pradesh Chief Minister Yogi Adityanath has tested positive for COVID-19 on Wednesday. I got tested for COVID-19 after showing some symptoms. The report is positive and I am in self-isolation and following all medical instructions. I a...

Reuters Sports News Summary

Following is a summary of current sports news briefs.With 100 days to go, Tokyo scrambles to stage pandemic OlympicsWhen Japan won the bid to host the Olympic Games eight years ago, it billed Tokyo as a reliable and secure location, contras...

Queen returns to royal duties after husband Prince Philip death

Britains Queen Elizabeth II has returned to royal duties four days after her husband Prince Philip the Duke of Edinburghs death on April 9.The 94-year-old monarch hosted an audience with Earl Peel for his retirement as he formally stepped ...

Arshad Warsi, Boman Irani to host Amazon Prime Video comedy show 'Lol- Hasse Toh Phasse

Amazon Prime Video on Wednesday announced the launch of the Indian version of the international Amazon original series LOL, with actors Arshad Warsi and Boman Irani attached as hosts. Titled LOL- Hasse Toh Phasse, the six-episode unscripted...

Give Feedback