Taxing oil exports enters Congress’ radar to contain fuel prices

The congressional offensive against Petrobras also put the proposal to tax Brazilian oil exports on the negotiating table. The higher the price of oil, the greater the potential revenue of the IE (Export Tax) with the sale abroad of the oil produced by the state-owned company. This type of tax is rarely used in Brazil. The idea is that its collection will be used to pay for the reduction of fuel prices.

The proposal will be discussed at the meeting of party leaders that the president of the Chamber, Arthur Lira (Progressistas-AL), called for next Monday to discuss Petrobras’ pricing policy, currently linked to the international market.

Last year, exports reached US$ 30 billion, with the average price of a barrel around US$ 70. Today, the price of Brent oil projected for August is around US$ 113. With an average of US$ 110 in 2022, exports could reach nearly $50 billion this year.

In reaction to the diesel and gasoline price readjustment, Lira announced that parliamentarians will approve a proposal to double Petrobras’ CSLL (Social Contribution on Net Income) in order to cover the difference in the cost of diesel from abroad or be used to give a voucher to truck drivers, taxi drivers and app drivers outside the spending ceiling, the rule that limits the growth of expenses to inflation. In practice, the measure suggested by him is a subsidy.

According to him, there is already a proposal similar to this one in the United States, made by President Joe Biden. “Oil companies there pay 21% tax on profits, and they are discussing doubling it to 42%,” he pointed out.

As it is a contribution, the CSLL increase needs a period of three months to take effect (called novena). An increase in the Income Tax would require waiting for the turn of the year to start being charged. Today, the CSLL rate for oil companies is 9%.

In an interview with GloboNews, Lira said that Congress will open the “black box” and change the readjustment policy, currently linked to the price in dollars practiced in the international market. “She does not reveal how she does this accounting of the pricing policy. It is necessary that now we have to discuss this pricing policy of Petrobras and call Cade once again to the responsibility for the monopoly that exists in Petrobras”, she said.

For deputy Danilo Forte (União-CE), rapporteur for the PEC (Proposed Amendment to the Constitution) which deals with biofuels and is part of the package announced by the government to reduce fuel prices, “it is time” to collect the Export.

“We exempt Petrobras from the product, and it becomes a profit margin for her. We will discuss this at the meeting on Monday,” Forte told Estadão. “What’s the point of giving this exemption if the Brazilian people are not benefiting at this time of high prices and war,” he pointed out.

Forte is also the rapporteur of Provisional Measure 1,118, which restricts until December 31, 2022 the use of tax credits arising from social contributions (PIS/Pasep and Cofins) to fuel producers and resellers.

To grant a subsidy, the government will have to make an exception to the spending ceiling. There is already a PEC in the Senate to change the rule and allow the Union to compensate the states that reduce the tax rates on diesel and cooking gas to zero.

The two proposals can be used for changes that the leaders decide to propose on Monday. Another project, PL 1,472, authored by Senator Rogério Carvalho (PT-SE), could also be used in this political offensive against Petrobras after the company readjusted the price of diesel and gasoline.

This project has already been approved by the Senate and has the support of its president, Rodrigo Pacheco (PSD-MG). It creates price guidelines for diesel, gasoline and liquefied petroleum gas and contains gaps in the text that force a change in Petrobras’ pricing policy, as the government and Centrão leaders want.

For experts, the project, which was approved at the height of the price surge due to the war between Russia and Ukraine, is confusing, weakens the policy of price freedom and contains gray areas when determining that the internal prices charged by producers and importers must reference the average international market quotations, internal production costs and import costs, “as applicable”.

The reading is that this point of the text — “as applicable” — could be used anyway, putting a “sword to the head” for future price control.

The project envisages the creation of a stabilization account with government revenues to reduce the impact of price volatility. Pacheco wants this account to be filled with dividends paid by Petrobras for the company’s profit.

“If the fuel price situation is getting out of hand, the government must accept to share Petrobras’ huge profits with the population through a price stabilization account in times of crisis,” he wrote on his Twitter account.

The economic area has always been against the creation of this account and the adoption of subsidies. To change the pricing policy, members of Petrobras claim that it will be necessary to change the State-owned Companies Law and then the statute.

One of the obstacles that were included after the scandals uncovered by Lava Jato is the autonomy of the director of governance and compliance. He has veto power when he judges that the matter under discussion is in violation of the company’s governance and compliance.

This position is currently held by director Salvador Dahan. “So that he doesn’t go around pushing some emergency buttons in this process, it is to be expected that they will try to change the powers of this executive board,” said a source.

About Yadunandan Singh

Born in 1992, Yadunandan approaches the world of video games thanks to two sacred monsters like Diablo and above all Sonic, strictly in the Sega Saturn version. Ranging between consoles and PCs, he is particularly fond of platform titles and RPGs, not disdaining all other genres and moving in the constant search for the perfect balance between narration and interactivity.

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