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State of Rio extinguishes fiscal benefit of oil sector

 

The Rio de Janeiro Legislative Assembly (Alerj) extinguished a special tax regime for the oil sector, in the midst of a strong financial crisis, on the grounds that the exemptions prevented the state collection of about 3.5 billion reais only in 2015.

The Legislative Decree, which extinguished the differentiated regime that reduced the collection of ICMS on equipment used in the sector, was approved by 46 votes in favor and none against, and was published in the Official Gazette yesterday.

The benefit was applied under the special customs regime for the export and import of goods destined for oil research and production (Repetro), as a way of stimulating investments.

According to Alerj, the Repetro is a federal regime, but was regulated in the state by decree.

The measure, which was proposed by Mr André Ceciliano (PT), begins to take effect from 2017.

“When Petrobras’ monopoly was broken, it had to create an attraction to bring companies and investors because of the risk. No one knew the exploratory activity in Brazil and it was justified. Now, with the pre-salt at full steam, it does not justify any more, ” Ceciliano told Reuters.

The extinction of the benefit, however, was harshly criticized by the executive secretary of the Brazilian Petroleum Institute (IBP), Antonio Guimarães.

“It is a measure that not only discourages investments by operators but also detracts from the competitiveness of the local supply chain, I think it’s a tremendous shot in the foot,” said Guimarães.

Categories: Uncategorized

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