Brazil

Brazil

Approves tax credit for ethanol industry

01 May 2013

The Government announced that the PIS/Cofins taxes on ethanol will be cut from 12 percent to almost zero from 1 May 2013. In addition, the mandatory blend of anhydrous ethanol in petrol will be raised to 25 percent. In addition, the Banco Nacional de Desenvolvimento Econômico e Social (BNDES, the state development bank) will provide credit lines for expanding the ethanol planted area. Rates on these loans will go down substantially: from 8.5-9.5 percent in 2012 to 5.5 percent. At the same time, R2bn will be made available to finance storage of ethanol during the inter-harvest period in December-April, at 7.7 percent rates.