House of Representatives may vote on bill to guarantee tax advantages for biofuels.

The Speaker of the House of Representatives, Hugo Motta, said on Tuesday (7), during a meeting of leaders, that he will put to a vote the supplementary bill that guarantees a favorable tax regime for biofuels if the federal government does not withdraw, by this Thursday (9), the subsidy granted to gasoline. The information was published by the newspaper The State of São PauloAccording to representatives of the ethanol sector interviewed for this report, the subsidy of R$ 0.44 per liter of gasoline, announced by the government in May, has caused estimated losses of between R$ 0.25 and R$ 0.30 per liter for ethanol, reducing its competitiveness against fossil fuels and contradicting the tax differential foreseen in the Constitution. The bill that may be analyzed by the plenary was presented by the government leader in the Chamber of Deputies, Paulo Pimenta. The proposal establishes that the extraordinary revenue from oil be used to proportionally reduce federal taxes levied on fuels. Last week, the interim Minister of Finance, Dario Durigan, stated that the bill "has lost its reason for being" given the progress of negotiations to end the conflict in the Middle East, which motivated the creation of the emergency measures. The opinion of the rapporteur of the proposal, Deputy Marussa Boldrin, was presented at the end of May and maintained the essence of the original text. The proposal authorizes that the revenue loss resulting from measures adopted by the government to mitigate the effects of the international energy price increase be offset by increased revenue generated by the oil sector. Among the main changes promoted by the rapporteur is the inclusion of a provision obligating the Union to preserve a favorable tax regime for biofuels, ensuring that their tax burden remains lower than that of fossil fuels, even during the period of gasoline subsidies. This measure seeks to guarantee the competitive advantage foreseen by Constitutional Amendment No. 132. The report also eliminates the limitation on offsetting PIS/Cofins credits in ethanol production, allowing the credits accrued to be used to offset the sector's own debts.

This text was translated by machine from Brazilian Portuguese.