The government may be required to compensate ethanol companies if it zeroes the gasoline tax.

The government's decision to send to Congress a supplementary bill that authorizes it to zero the tax on gasoline has the potential to bring a problem for the economic team. In practice, the Ministry of Finance may be required to compensate the country's ethanol companies. Stay informed about the news that matters to you! This possible obligation stems from Constitutional Amendment 123 of 2022, which mandates that the government must maintain a favorable fiscal regime for biofuels intended for final consumption to ensure a lower taxation than that imposed on fossil fuels. A supplementary law must define these rules. However, this norm has not yet been enacted. The amendment also states that, while a supplementary law on the subject does not come into effect, the competitive differential of biofuels intended for final consumption in relation to fossil fuels will be guaranteed by maintaining, in percentage terms, the difference between the rates applicable to each fossil fuel and ...