Hydrated Ethanol woke up to great news where the states of São Paulo, Minas Gerais, Paraná, Goiás, Rio de Janeiro, Paraná and Santa Catarina announced the reduction of the Tax on Circulation of Goods and Services (ICMS).
In São Paulo, the rate increased from 13.3% to 9.57%, which will result in an impact of R$563 million in revenue by the end of the year. The revenue waiver for the state is estimated at R$125.1 million per month. The government estimate is that the action will reduce the value at the pump by R$0.17.
In Minas Gerais, the rate went from 16% to 9%.
"In addition to easing the pockets of miners, the tax reduction will maintain the competitiveness of biofuel, an important generator of jobs in our state", said Governor Romeu Zema, on social media.
In Paraná, the ICMS on hydrated ethanol increased from 18% to 12%.
In Goiás, the tax went from 30% to 17%, which should generate a decrease of about 85 cents in the liter of fuel at the pumps. For hydrous ethanol, the rate dropped from 25% to 17%, with an estimated reduction of R$0.38 per liter at service stations.
Other services also had the ICMS collection reduced in Goiás, such as telecommunications services, which went from 29% to 17%, and electric energy, which went from 25% to 17% for low-income families and from 29% to 17% for other consumptions.
This reduction occurs as a result of the enactment, last week, of a constitutional amendment that provides for Union compensation for states that reduce the tax burden on biofuels. This amendment is part of the same proposal that foresees the increase of social benefits, and the creation of others, until December.
Last month, São Paulo had already announced the reduction in the rate of gasoline, from 25% to 18%. The ICMS on electricity operations was also reduced from 25% to 18%, in relation to residential bills with monthly consumption of more than 200 kilowatt-hours and communication services.
Last week, the governments of Rio de Janeiro, Santa Catarina and Minas Gerais also announced the reduction of ICMS on fuels.
In this case, the measure complies with a law passed in Congress that limits the ICMS tax rate on fuels and other items considered essential to a maximum of 18%. The law affects the ICMS rate for natural gas, electricity, communications and public transport.
So far, 11 states and the Federal District have filed a lawsuit with the Federal Supreme Court against the law that reduces ICMS. They claim they will have billions in revenue losses that could jeopardize mandatory investments in health and education.
Sources: investing.com
