By Roberto Samora and Marcelo Teixeira
SAO PAULO, Feb 2 (Reuters) – The Brazilian authorities has ended a tax exemption on imports of gasoline ethanol, with instant impact, in line with the nation’s agriculture ministry, a transfer that will principally harm the US ethanol business.
Ethanol imports will now need to pay a tax of 16% to enter Brazil till the tip of the 12 months. That levy will rise to 18% in 2024, the agriculture ministry mentioned in an announcement late on Wednesday.
The US is an everyday provider of ethanol to Brazil’s Northeast area and the tax change might impression that commerce.
“We had been dissatisfied by Brazil’s choice to revive a excessive tariff price on U.S. ethanol imports,” Geoff Cooper, president and chief government of RFA (Renewable Fuels Affiliation) mentioned on Thursday.
“Because the world’s two largest ethanol producers and shoppers, the U.S. and Brazil needs to be setting an instance of cooperation and open markets – not protectionism and market interference,” he mentioned.
Brazil’s former administration of right-wing President Jair Bolsonaro had suspended the ethanol import tax final March as a part of different measures to cut back gasoline prices, that included scrapping federal taxes on native gross sales of all fuels.
The choice by the brand new administration of leftist President Luiz Inacio Lula da Silva to finish the exemption on ethanol imports comes solely days earlier than he travels to the US to satisfy President Joe Biden – the primary assembly between the 2 since Lula took the submit early in January.
RFA mentioned it hopes the problem will likely be addressed within the assembly on the White Home.
Brazil Agriculture Minister Carlos Favaro mentioned the tax exemption was hurting the native sugar and ethanol business and needed to finish.
The ministry mentioned Brazil mills have the aptitude to provide ethanol to the entire nation with out the chance of costs going up.
(Reporting by Marcelo Teixeira; Enhancing by Invoice Berkrot)
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