Financial market pressure dampened support for Fuels PECs, party leaders say

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Public criticism from the financial markets of the fuel tax reduction proposals weakened support even from the federal government’s allied base. According to reports made to CNN by party leaders, the criticism that the initiatives represent an attempt to circumvent the LRF (Law of Fiscal Responsibility) discouraged deputies and senators who previously defended the proposals.

The assessment, which is shared by members of the National Congress’ summit, is that the opposite movement of businessmen and investors, some of whom have come into contact with congressmen, is already beginning to reverse support among government parliamentarians.

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One of the initiatives, presented by Senator Carlos Fávaro (PSD-MT), authorizes the Union, states and municipalities to reduce the price of fuel, cooking gas and electricity until 2023, without the need to present a source of compensation.

The proposal was dubbed in the Ministry of Economy as “PEC Kamikaze”, since its fiscal impact is estimated at R$ 100 billion, with the risk of raising inflation with the forecast of payment of a diesel aid to autonomous truck drivers and gas vouchers from 100% to 17 million.

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The second proposal, which was formulated with the support of the Civil House, was presented by federal deputy Christino Áureo (PP-RJ) and, on an authorizing basis, allows the Union and states to reduce taxes on fuel. The measure has an estimated impact of BRL 54 billion.

This Tuesday (8), in the face of pressure from the financial market, the president of the Federal Senate, Rodrigo Pacheco (PSD-MG), said that the two proposals may be unnecessary if the bill that freezes the collection of ICMS is approved. , which has already passed through the Chamber of Deputies.

In private conversations, the president of the Chamber of Deputies, Arthur Lira (P-AL), has also defended the vote on the initiative that adopts a frozen rate of the tax for twelve months before the discussion around the reduction of taxes on fuel.

The expectation is that the bill, which has the support of the Ministry of Economy, will be submitted to the plenary of the Federal Senate next week. If the initiative is changed, as discussed by opposition senators, it will need to be analyzed again by the Chamber of Deputies.

Source: CNN Brasil

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