According to BTG, the PIS/Cofins tax monophase on ethanol, which taxes only one step in the chain, increases the competitiveness of hydrous ethanol relative to gasoline. Both hydrous and anhydrous ethanol will be subject to a fee of about BRL 0.19 per liter during the reform’s transition phase. With the increased tax burden, the price of hydrous ethanol should be BRL 2.90 per liter, which is 70% of the value of fossil fuels and equal to the production of gasoline. Without the tax change, the parity price would be lower, at BRL 2.84 per liter. The Senate-passed tax reform regulations must now be reviewed by the Chamber before being approved by the president.
Sources: Globo Rural /Canonline (*Translated by Ia Niani)