How tax cuts on fuels may impact Brazil’s tax reform?

Bolsonaro has engaged in tax populism to cater to his support base

fuel prices tax reform brazil
Photo: Rafastockbr/Shutterstock

President Jair Bolsonaro has proved to be quite sensitive to demands concerning fuel prices—which makes sense, considering the major truck drivers strike that briefly paralyzed the country in 2018. However, by putting tax cuts on the table, he has met with an economic conundrum with more chances of causing a political stir than actually reducing prices in the short term.   

Since January, the president has been attacking the tax burden on petrol as the reason why Petrobras’ cuts on fuel prices in refineries do not translate into decreases at the pumps. His target has been the State Goods and Services...

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