Bolsonaro raises Aid Brazil from R$400 to R$600

The exact amount is not yet known, but the idea gained traction from yesterday to today and aims to give relief to the poorest voters.

Palácio do Planalto decided to increase the value of the Auxílio Brasil installment to possibly R$600 per month by the end of this year. Today, the value is R$ 400. For that, the government of President Jair Bolsonaro (PL) would give up on compensating States that have zero ICMS rate on diesel and gas.

In the assessment of the government summit, the measure of increasing aid by R$200 will reach voters more quickly. ICMS compensation would depend on the governors and could be muffled by possible adjustments by Petrobras.

Economy Minister Paulo Guedes told the Power 360 that in fact this measure is being studied by the political area of the government, but has not yet confirmed exactly how it will be.

The idea right now is this:

  • BRL 400 basic family income +
  • R$200 in aid for the war in Ukraine (to compensate for the high prices of food and energy).

In practice, for the 18.1 million families, what counts is the monthly payment of R$ 600. The argument to be used by the government is that the war in Ukraine imposed the need to offer relief to the poorest, who suffer from food and energy price inflation.

Bolsonaro announced on June 6 that he intended to compensate states for zeroing taxes on diesel and gas by December 2022. The government also proposed zeroing PIS/Cofins and Cide on gasoline and alcohol.

The changes, however, reduce the collection of the States with the tribute. Governors do not like the project and resist changes. O Power 360 found that the ICMS tax cut should cost, in all, R$ 73 billion.

The Fuels PEC, under discussion in the Senate, set aside an amount to compensate state governments for the losses. Even so, the proposal was rejected by many finance secretaries.

immediate measures

In line with this proposal, the Palácio do Planalto also decided to increase the frequency of gas assistance, known as gas vouchers, and distribute a voucher to truck drivers instead of changing the State-owned Law by a Provisional Measure.

The voucher for drivers can reach R$ 1,000 as a way to alleviate the impacts of high fuel prices. In the case of aid for cooking gas, the aim is to increase the frequency so that the amount — paid bimonthly — is paid every month.

Another option would be to increase the amount, doubling what is currently paid, but keeping payments every 2 months. More than 5 million families received a BRL 53 gas allowance in June 2022.

The estimated cost of expanding the truck driver assistance is R$ 4 billion. The change in the gas voucher will cost around R$ 1 billion for the same families that already receive the benefit.

The total cost of the new measures should vary between R$5 and R$6 billion with the new truck driver voucher and the boosted gas voucher. There is discussion of using extraordinary income, such as surplus dividends, which are not yet accounted for in the Budget, to defray these new expenses. The extraordinary expenses would be justified by the emergency situation with the deterioration of the international scenario.

Government and Centrão want to mitigate the effect of inflation among poorer voters. Fuel prices have put pressure on inflation in the country and worried President Jair Bolsonaro (PL) just over 3 months before the October elections.

Both the expansion of Auxílio Brasil and the creation of vouchers for truck drivers and gas vouchers are evaluated as immediate measures, with practical effect in a short time. For this reason, they are well regarded by the Planalto.

The matter should be discussed at the meeting of leaders in the Senate this Thursday (23.jun).

About Abhishek Pratap

Food maven. Unapologetic travel fanatic. MCU's fan. Infuriatingly humble creator. Award-winning pop culture ninja.

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