The government will eliminate the tax on imports of food and ethanol

The government estimates that zeroing the ethanol rate will lower the price of petrol by R$0.20 at the pump.| Photo: Rovena Rosa/Agência Brasil.

The federal government announced this Monday (21) that it has decided to eliminate, by the end of this year, the import tax on certain foods and also on ethanol. The tax cut will affect products such as coffee, margarine, cheese, pasta, soybean oil and sugar. The government estimates that zeroing the ethanol rate will lower the price of petrol by R$0.20 at the pump. In addition to being sold separately, ethanol represents 25% of each liter of gasoline.

The measure should be published this Wednesday (23) in the Official Gazette (DOU), the O Globo newspaper reported. The coffee import tax is 9%; margarine, 10.8%; cheese, 28%; noodles, 14.4%; sugar, 16%; and ethanol is 18%.

“We have an estimate that this could cause the price of gasoline to drop by around 20 cents at the pump. This is a static analysis. In practice, this measure will eventually reduce the price growth momentum of BRL order 0.20,” said Lucas Ferraz, Secretary of Foreign Trade.

The Economy Ministry looked at the INPC, a price index that calculates inflation for low-income families, to define which foods will get a tax cut. The file understands that these products are among those which weigh the most in the definition of the price indices.

“We are concerned about the impact of inflation on the population. We are setting a zeroing of the import tariff on just over seven products by the end of the year. This does not solve the inflation, that is, with monetary policy, but it generates an important incentive, ”said the executive secretary of the Ministry of Economy, Marcelo Guaranys.

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