Brazil will resume taxes on gasoline and ethanol, which were suspended last year by the previous government, with the aim of improving revenues and avoiding a wider fiscal imbalance, the finance ministry announced on Monday.
The Workers’ Party (PT), led by Lula da Silva, opposed the reintroduction of taxes, arguing that such a measure would have a direct impact on the poorer classes.
According to the PT, the government should first review the policy of the state-owned Petrobras, which sets domestic fuel prices based on fluctuations in international crude oil markets.
Although the fees to be applied to these two fuels have not been specified, the Brazilian government explained that the measure should allow the collection of about 28.8 billion reais (about 5.5 billion euros) this year, which corresponds with about 1.5% of gross domestic product (GDP).
Fuel taxes had been suspended in May of the year in a controversial decision by then-President Jair Bolsonaro, who was seeking re-election.
The measure was criticized at the time by both the market and the opposition, who viewed it as a “populist” move in the run-up to the election, although Bolsonaro justified it as a way to contain inflation, at the time approaching 10% a year .
On taking office on January 1, Lula da Silva extended the suspension of fuel taxes, but the delicate fiscal situation in the country forced the Ministry of Finance to review the decision.
Tariffs on gasoline and ethanol will be set in the coming days, but taxes on diesel and cooking gas will remain suspended.
Source: DN
