Congress considers doubling rate on Petrobras’ net income

As soon as the vote on yet another measure to contain the rise in fuel prices had finished – the cap on ICMS rates, a state tax –, the National Congress was surprised by a new announcement of a price increase by Petrobras. The decision by the state-owned company to pass on the rise in international fuel prices to distributors in Brazil inflamed senators and deputies, especially those allied to the Jair Bolsonaro government, and opened a race to identify more rigid and immediate solutions to force the company to insure – even if artificially – soaring prices for gasoline, diesel and cooking gas.

As soon as the new increase was announced, the president of the Chamber of Deputies, Arthur Lira (PP-AL), took to social media to communicate that he would convene leaders of the House benches to discuss an alternative to the successive increases in fuel prices. In the range, emerged from the installation of a parliamentary commission of inquiry (CPI) to the possibility of doubling the tax on the company’s net income.

The meeting took place at the official residence, on Monday (20/6), and was attended by technicians from the Ministries of Mines and Energy and the Economy. In addition to the servers, the president of the Federal Senate, Rodrigo Pacheco (PSD-MG) was also invited to attend. The senator was present and, according to Lira, will commit to taking the deputies’ suggestions for discussion with leaders of the House.

Double company tax

In addition to the outrageous speeches by Lira and Bolsonaro against the Parity Import Policy (PPI) of Petrobras prices, two proposals emerge as more viable alternatives to try to circumvent the crisis. The first strategy aims to promote changes in the Social Contribution on Net Income (CSLL) for all oil and gas companies.

The objective is to increase or double the tax on the net income of the oil company and other companies in the sector, which would make it possible to increase this contribution to 16% by the end of this year. Currently, Petrobras’ CSLL is 9%.

In practice, the measure, by increasing the collection of taxes by the Union, will allow the cost of imported fuels, such as diesel, for example, to be financed outside the spending ceiling. In addition, the extraordinary collection would make room for financing an eventual subsidy, in the form of aid for truck drivers, app drivers and taxi drivers, and low-income families for the purchase of cooking gas.

The expectation is that the issue about the CSLL will be included in the discussion of the Proposed Amendment to the Constitution (PEC) on Fuels, which is being processed by the Federal Senate and was created to enable full reimbursement to states and municipalities that zero ICMS rates on gasoline, gas and ethanol.

The text is still being built by the government leader, Carlos Portinho (PL-RJ), and there is no prediction of when it will go to the vote. The conversation between Lira and Pacheco scheduled for Monday afternoon even sought to discuss the feasibility of adding changes to the CSLL already in this PEC and their respective acceptance among senators. The meeting, however, ended without a decision. Further conversations will be held in the coming days.

export tax

The second alternative aired by the deputies is the creation of an export tax on crude oil. In this case, the emergence of the new tax would provide another source of revenue for the Union, which could use the money to finance the respective subsidies or absorb the fluctuation in prices, without passing on the impact directly to the consumer.

The creation of the new tax has already been discussed and discarded by senators in the context of the construction of the bill that seeks to establish a Stabilization Fund for Fuels. The initiative was suspended, due to the lack of agreement between the leaders of the House benches, who understood the measure as unconstitutional.

The bill approved in February by the Senate is also considered by deputies as a good solution to the crisis. The proposal, however, remains at a standstill in the Chamber and does not have good acceptance by the president of the House and the governing base.

On that Monday, Pacheco again demanded, in the presence of Lira and other deputies, that the matter be dealt with.

Authored by Senator Rogério Carvalho (PT-SE), the project is, in short, the creation of a kind of “savings” to amortize prices. The initiative would help contain fuel increases in the domestic market and minimize the impacts of Petrobras’ Import Parity Policy.

According to the proposal, the export tax rate will vary according to the price of a barrel of oil on the international market and will only be levied when the price exceeds US$ 45 per barrel. That is, up to this amount, operations will be tax-free. For prices above this value, the rate would be at least 2.5%, and could reach up to 20% if the quotation exceeds US$ 100, a scenario similar to the current situation.

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