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Bolsonaro maintains tax exemption for Manaus Free Trade Zone fuels



Bolsonaro maintains tax exemption for Manaus Free Trade Zone fuels

President Jair Bolsonaro backed off and maintained the tax exemption for fuels and oil products produced in the Manaus Free Trade Zone. The end of the benefit was stated in Law 14,183 of 2021, which was republished this Thursday (15.Jul.2021) with the veto of the end of the tax incentive. The end of the tax exemption for petroleum products in the Manaus Free Trade Zone was included by the Chamber of Deputies in the MP (Provisional Measure) that alters the taxation of banks and the chemical industry. MP 1,034 aims to offset the reduction in taxes on diesel and cooking gas and was sanctioned on Wednesday (14.Jul) by Bolsonaro. The law was published in the Official Gazette (Diário Oficial da União) on Thursday ( 15.jul) and maintained the article that changed the tax benefits of the Manaus Free Trade Zone. However, it was republished in an extra edition of the DOU with the veto of the article. According to the republication, there was an “incorrect” in the original version. In a message sent to Congress, President Bolsonaro said that the change “would make the normative and jurisprudential framework regarding the tax benefits applicable to operations involving the Manaus Free Trade Zone even more complex” .“Although the good intention of the legislator is recognized, the legislative proposal goes against the public interest, as it causes legal uncertainty”, he said. Here is the full version of the law’s republication and Bolsonaro’s message (1 MB). Oil products from the Free Zone of Manas are charged by fuel distributors in other regions of the country. These distributors say that the benefit unbalances the industry’s competition. However, representatives from Amazonas say that the incentive is fundamental for the local industry.In the MP’s vote in the Senate, senators from Amazonas, Eduardo Braga (MDB), Omar Aziz (PSD) and Plínio Valério (PSDB), said that this article was a piece outside the main objective of the text and should be rejected. Senate President Rodrigo Pacheco (DEM-MG) denied the request, but Senate government leader Fernando Bezerra Coelho (MDB-PE) said that the passage would be vetoed by Bolsonaro. senators said the government had broken the agreement. After the law was republished, Eduardo Braga went to social media to thank the president. He said that the end of the exemption was unconstitutional and was vetoed, “as had been promised by the government.” This means to say that the industry will not have a cost increase due to the loss of the tax benefits of the Free Zone for these oil products”, he said.Braga stated that the measure keeps the petrochemical industry and the processing industry in Manaus “on their feet”. Senator Plínio Valério also spoke about the “agreement signed with the bench” by President Bolsonaro. “If the MP had been sanctioned with the maintenance of article 8*, in practice it would remove the tax exemption for a series of products such as oil, lubricants and fuels. It would make our industrial pole unfeasible”, he said. continue reading

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