Brazil's lower house passes bill to fix state's fuel tax charges

Brazil's lower house on Wednesday approved the main text of a bill, pushed by President Jair Bolsonaro, to change a tax on gasoline and diesel that is seen hurting state governments' revenue. Lawmakers will now analyze and vote on several amendments before sending the final text to the Senate.


Reuters | Updated: 14-10-2021 06:02 IST | Created: 14-10-2021 06:02 IST
Brazil's lower house passes bill to fix state's fuel tax charges

Brazil's lower house on Wednesday approved the main text of a bill, pushed by President Jair Bolsonaro, to change a tax on gasoline and diesel that is seen hurting state governments' revenue.

Lawmakers will now analyze and vote on several amendments before sending the final text to the Senate. Bolsonaro has blamed the so-called ICMS tax for the rise in fuel prices that have contributed to his declining poll numbers, pushing for it to be changed. The change to the ICMS would relieve pressure on state-run oil company Petroleo Brasileiro , which Bolsonaro has lobbied to lower fuel prices, spooking investors.

Under the current system, the ICMS tax that each state levies moves in relation to fuel prices. The bill would oblige states to annually choose a fixed rate. Comsefaz, a national committee of state finance ministers, has estimated that the changes would cost state governments 24 billion reais ($4.4 billion) in lost revenue.

The price of diesel is a sensitive issue for Brazil's truck drivers, whose national strike in 2018 had a huge impact on the economy. Bolsonaro had the support of truck drivers in the 2018 election, and has courted them throughout his time in office. However, the president is struggling with rising inflation, a weak economy and anger over his handling of one of the world's deadliest coronavirus outbreaks.

($1 = 5.5134 reais)

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

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