Bolsonaro asks Congress to power to zero diesel taxes

Amid discussions in the government about a proposal to reduce fuel taxation, President Jair Bolsonaro (PL) made an appeal, this Wednesday (2), to parliamentarians to support a measure that would allow him to zero federal taxes on fuel. diesel without revenue compensation.

“I now ask the parliamentarians here for help. No one is going to do anything barbarity, but I want them to give me the powers to eliminate the tax on diesel – on cooking gas we have already zeroed – to face these challenges,” Bolsonaro said during a ceremony at the Palácio do Planalto in allusion to the new rules of proof of life of the INSS (National Institute of Social Security).

In making the statement, Bolsonaro also stressed that the government is looking for an alternative to contain fuel prices.

Over the last few weeks, the government has discussed sending a PEC (Proposed Amendment to the Constitution) to change fuel taxation. The PEC would be used to allow the reduction of rates without the need for compensation, removing requirements from the LRF (Law of Fiscal Responsibility).

The team of Minister Paulo Guedes (Economy) has already convinced Bolsonaro to limit the scope of the exemption to diesel only, which reduces the impact of the measure to up to R$ 17 billion. A tax cut that also covered gasoline, ethanol and electricity could cost more than R$70 billion.

On Monday (31), Bolsonaro said that the government gave up sending the PEC to Congress. The solution, he said, must come from Congress itself.

The government had already been dehydrating the original proposal, mainly due to internal resistance. First, it gave up on creating a fund to stabilize prices, then it limited the benefits of PEC to diesel.

Also on the radar of the economic team a linear cut in IPI (Tax on Industrialized Products) rates as a way to pressure governors to accept a change in the collection of ICMS (Tax on Circulation of Goods and Services) on fuels.

Inflation and the advance of fuel prices are pointed out by auxiliaries as challenges for the president’s reelection project.

In an attempt to defend himself, Bolsonaro has blamed PT administrations for the pressure on fuel prices.

Also on Wednesday, he said that the cost of fuel is high, in part, “because of the thievery or bad administration of the past” – in a reference to the PT governments.