This Thursday, the Council of Ministers approved temporary support for freight transport operators, emergency vehicles and producers in agricultural cooperatives. IMF warns that the measures must be temporary.
O fuel support temporary will only be for transport operators goodsvehicles Emergency Room and producers of agricultural cooperatives.
The objective is to mitigate the rise in fuel costs due to war in the Middle East.
“Financial support was approved temporary for freight transport operators, emergency services and producers of agricultural cooperatives, which aims to mitigate the increase in fuel and Adblue costs”, stated the Minister of the Presidency, Antônio Leitão Amaroin a press conference, after the Council of Ministers meeting.
This fuel aid, paid in one go, varies between 114 and 420 euros depending on the size and weight of the vehicles.
In the case of Adblue, it varies between R$4.20 and R$37.80, also depending on size and weight.
IMF against taxes on windfall profits
O International Monetary Fund recommends that no taxes be applied about unexpected profits in energy, as Portugal wants, said director of the IMF’s Europe Department, Alfred Kammerto Lusa.
The official argued that the opposition to this measure is due to experience, as it had already been applied previously after the price rise seen following the invasion of Ukraine by Russia.
The conflict in the Middle East once again brought a rise in prices, mainly focused on fuel, and Portugal, together with Germany, Spain, Italy and Austria, submitted a request to the European Commission for the creation, at European Union level, of an itax on extraordinary profits from energy companiessimilar to measures to contain the 2022 energy crisis.
For Alfred Kammer, when the expectation is created that whenever there is this type of shock there will be a tax, “investors will take this into account in their investment decisions and becomes highly distorted“.
In the last crisis it was observed that “the application of these unexpected taxes is not easy, they were often recalibrated because they needed to be adjusted” and their implementation was a complex project, he added.
Furthermore, the revenue and the yield of these measures was much lower than expected by the Government, he said, concluding that these reasons lead the IMF to recommend that taxes not be applied to extraordinary profits.
The Portuguese Finance Minister defended this measure, pointing out that Brussels signaled that it should authorize it.
In an interview with Antena 1, this week, Joaquim Miranda Sarmento considered that this is an important mechanism at this time.
As for the amount that the Government expects to raise with this tax, Miranda Sarmento said that it will depend on the modeling of the tax and the circumstances and duration of the war.
Measures must be temporary
With regard to ISP discounts, a measure that was also recovered from the same time, the IMF advises that “measures that suppress the price signal should not be adopted, because with the increase in prices consumption will slow down and this is one of the adjustments to balance supply and demand”.
As measures “must really be targeted at the vulnerable part of the population”defended, as well as temporary.
“Some countries still have temporary measures in place for the price shock caused by the Russian gas cut”, he highlighted, pointing out that it was not truly temporary and this is one of the risks that increases budgetary costs.
“Most businesses can weather this energy price shock, so any support for businesses should only focus on viable energy-intensive industries,” he argued.
The official also highlighted that when price-based measures are applied, “the richest part of the population benefits more than the poorest part”being able to deal with the shock better.
