PEC that guarantees advantages for biofuels advances in the Chamber

The Constitution and Justice Committee of the Chamber approved this Monday (20) the admissibility of the PEC (proposed amendment to the Constitution) that seeks to preserve a regime favored by biofuels – which could lose competitiveness with measures to reduce the cost of recently approved gasoline and diesel.

The opinion on admissibility, prepared by deputy Danilo Forte (União Brasil-CE), was approved in a symbolic vote. Now, the next step is the creation of a special commission to analyze the merits of the text.

The PEC was approved in the Senate last Tuesday (14), the same day that the Chamber sent a complementary bill to sanction that limits the incidence of ICMS to 17% or 18% on fuel, energy, telecommunications and transport.

​The rise in prices has been the target of wear and tear for President Jair Bolsonaro (PL), who is seeking re-election this year.

The PEC on Biofuels adds an item to the article of the Constitution that deals with the right of all Brazilians to an ecologically balanced environment, with the objective of guaranteeing an advantageous tax situation for non-polluting fuels.

The text does not exactly establish the tax rates that must be levied on biofuels. These percentages must be established by means of a supplementary law.

The PEC only determines that a “favored tax regime for biofuels intended for final consumption” must be maintained in the form of the complementary law. This will be done by ensuring lower taxation than fossil fuels.

As long as the complementary law is not approved by the National Congress, this competitive differential for biofuels in relation to fossil fuels will be guaranteed by maintaining the difference in rates applied to the two types at the level in force on May 15 of this year.

In the first 20 years after the enactment of the PEC, the text provides that any complementary law will not be able to establish a competitive differential at a level that is lower than the one in force on that date.

The text also determines that changes in the rates applied to a fossil fuel, either by legislative proposal or by judicial decision, will automatically imply in the change of rates applicable to biofuels that are substitutes for it, in order to, at least, maintain the difference in rates previously existing.

The proposal refers in particular to taxes such as PIS/Pasep and ICMS (Tax on the Circulation of Goods and Services), according to the proposal’s report —the text of the PEC itself does not expressly mention the taxes.

The Biofuels PEC was presented by former government leader Fernando Bezerra Coelho (MDB-PE). The senator is a representative of the state of Pernambuco, where there is a sugar and alcohol hub.

Bezerra even included in the proposal approved the day before, as rapporteur, the extension until 2027 of the zero rate of federal taxes on hydrated alcohol fuel and on anhydrous alcohol added to gasoline. However, it retreated after government resistance.

The Biofuels PEC is the second proposal approved by the Senate, in the package to try to reduce fuel prices. Bezerra estimates that the approval of the measures could cause a drop in the price of a liter of gasoline by R$ 1.65 and by R$ 0.76 per liter of diesel.

This week, the Senate is also due to vote on the PEC presented by government leader Carlos Portinho (PL-RJ), which provides for transfers of up to R$26.9 billion to states that choose to reduce their fuel rates to zero.

Earlier, the CCJ approved, also in a symbolic vote, the admissibility of the PEC that establishes the national salary floor for nurses, technicians and nursing assistants and midwives. The text was approved by the Senate on June 2.

The PEC was prepared and approved to provide legal certainty for the national level of the category.

A bill providing for the minimum wage for nursing had already been approved by the National Congress. However, the proposal was not even forwarded by the Chamber of Deputies for presidential sanction, as there was fear of a veto by Jair Bolsonaro (PL) or even lawsuits. This was because there was a risk that the proposal could be a defect of initiative.

The text of the PEC determines that a federal law will establish the national salary floors for nurses, technicians and nursing assistants and midwives. In other words, it allows the previously approved bill to have legal conditions to be applied.