LATIN AMERICA ADVISOR

Energy ADVISOR

A daily publication Of the dialogue

March 17, 2023

Will Taxes on Fuel Reduce Brazil’s Fiscal Deficit?

The Brazilian government recently resumed collecting taxes on fuel, a move pushed by Finance Minister Fernando Haddad. // File Photo: Brazilian Government.

Q

A

Fernando Xavier and Leonardo Martins, partners at Machado Meyer: “There is a broad consensus that an indiscriminate tax exemption over fossil fuels is not a good policy. In addition to the negative impact on the country’s fiscal stability, it creates an anachronic incentive to consumption of fossil fuels at a time when the world is engaging huge efforts on energy transition to a greener economy. It also fails to differentiate those sectors of economy that mostly demand government protection (such as public transportation, essential logistics and low-income families) from sectors that are more capable of absorbing price fluctuation. A better policy for fuel pricing would need to consider how to direct federal revenues to those sectors more in need of protection, while at the same time creating the kind of incentives to boost the country’s transition to a more renewable energy matrix. Therefore, …”

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ABOUT THE Energy ADVISOR

A sister publication of the Inter-American Dialogue’s daily Latin America Advisor, the weekly Energy Advisor captures fresh analysis from business leaders and government officials on the most important developments in oil and gas, biofuels, the power sector, renewables, new technologies, and the policy debates shaping the future of energy in the Western Hemisphere and beyond. To subscribe or for more information, contact Gene Kuleta, editor of the Advisor, at gkuleta@thedialogue.org.

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Staff

Gene Kuleta
Editor
P. 202.463.2920
E. gkuleta@thedialogue.org

Carl David
Goette-Luciak
Reporter

Nili Blanck
Reporter

board of advisors

Nigel Blackaby
Global Head, International Arbitration Group,
Freshfields Bruckhaus Deringer

Jimena Blanco
Chief Analyst,
Verisk Maplecroft

María José Cortés
Head of ESG,
Atlas Renewable Energy

Jeffrey Davidow
Senior Counselor,
The Cohen Group

Analia Gonzalez
Leader, Arbitration & Litigation,
Laitn America, BakerHostetler

Jonathan C. Hamilton
Partner,
White & Case

Raul Herrera
Partner, Corporate &
Securities Practice,
Arnold & Porter

James R. Jones
Chairman,
Monarch Global Strategies

Jorge Kamine
Partner, Corporate &
Financial Services,
Willkie Farr & Gallagher

Craig A. Kelly
Senior Director,
Int’l Government Relations,
Exxon Mobil

Jeremy Martin
Director,
Energy Program,
Institute of the Americas

Larry Pascal
Chairman, Americas
Practice Group,
Haynes & Boone

R. Kirk Sherr
President,
Clearview Strategy Group

Daniela Stevens
Director,
Energy Transition and Climate Program,
Inter-American Dialogue

Doris Rodríguez
Partner,
Hunton Andrews Kurth

Alexandra Valderrama
Director,
International Government
Affairs, Chevron

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