Brazil’s Economy Ministry calculates that a bill to cut fuel taxes sought by President Jair Bolsonaro could cost the Treasury 54 billion reais ($10 billion) a year in lost revenue, a source at the ministry with knowledge of the matter said on Thursday.

The ministry opposes the bill presented to Congress by a government ally and was not involved in its drafting. It would allow the federal government, states and municipalities to reduce to zero tax rates on fuel and gas.

The reduction of the PIS/Cofins tax on diesel would have an impact of 18 billion reais in lost revenue, and on gasoline it would mean 23.8 billion reais less, plus 3 billion reais less collected through the CIDE tax on gasoline, the source said.

Proposed reductions of taxes on other products, such as anhydrous and hydrated alcohol, and biodiesel, would lose the Treasury another 9 billion, he said. ($1 = 5.2839 reais)
Source: Reuters (Reporting by Bernardo Caram in Brasilia Editing by Matthew Lewis)