Approves tax credit for ethanol industry

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.

• Type:

  • Promotion and facilitation (Investment incentives)

• Industry:

  • Primary (Agriculture, forestry and fishing)

• Sources:

  • Ministry of Finance, Press release, http://www.fazenda.gov.br/, 23 Apr 2013
  • Economist Intelligence Unit, Government tries to revive the ethanol industry, http://viewswire.eiu.com/index.asp?layout=VWArticleVW3&article_id=1720437956®ion_id=440000444&refm=vwReg&page_title=Latest+analysis, 26 Apr 2013