Government project links extra oil revenue to the reduction of PIS, Cofins and Cide on fiscally neutral fuels
The president’s government (PT) wants to use the increase in revenue from the rise in oil prices caused by the war in the Middle East to reduce taxes on fuel.
The proposal was announced this Thursday (April 23, 2026) and sent to Congress through a complementary bill. The Minister of Institutional Relations, José Guimarães, said that the project will be discussed at a meeting of leaders on Tuesday (28 April). “The project was filed today”he said. Read (PDF – 99kB).
According to the Minister of Finance, Dario Durigan, the measure brings fiscal neutrality, with full compensation for the drop in revenue due to extraordinary gains in the oil sector.
The Minister of Planning and Budget, Bruno Moretti, said that the mechanism will mitigate the effects of the war on energy prices “without putting pressure on public accounts, which is central to protecting the population and maintaining fiscal balance”.
Moretti stated that the proposal authorizes the government to reduce taxes such as PIS (Social Integration Program), Cofins (Contribution for the Financing of Social Security) and Cide (Contribution for Intervention in the Economic Domain) on gasoline and ethanol – similar to what it has already done with diesel and biodiesel – whenever there is an extraordinary increase in revenue from oil.
The minister said that Brazil increases revenue from royalties, sharing contracts and sales from PPSA (Pré-Sal Petróleo SA) when international prices rise.
The limit for the reduction will be exactly this additional revenue. “Fiscal neutrality will always be assured”, he said. The reduction, if approved by Congress, will be made by presidential decree and may last up to 2 months, with the possibility of reevaluation depending on price fluctuations.
Moretti said that the government has already removed taxes on diesel and biodiesel, but has not yet applied the measure to gasoline and ethanol. According to him, a new round could include these fuels and extend the diesel tax exemption.
According to the Ministry of Planning and Budget, each reduction of R$0.10 in taxes on gasoline represents an impact of approximately R$800 million over a period of 2 months. This cost, however, will be limited to the extraordinary revenue available.
The minister stated that the project will be presented with an urgent request, due to the volatility of oil and the effects of the war. He said that the dialogue with the Chamber and Senate was positive and that the government is confident of approval.
TAX RULES
The Minister of Finance, Dario Durigan, declared that there will be no immediate announcement of a tax cut. He said that the economic team is looking for a permanent mechanism to mitigate external impacts without compromising fiscal rules.
Durigan stated that Brazil is among the countries with the greatest resilience to face the international scenario. He cited measures already adopted, such as the removal of taxes on diesel, subsidies and regulatory actions, and said that the proposal under discussion maintains this strategy.
