The objective is to relieve airline cash and avoid high ticket prices; without change, rate jumps from 3% to 15% in 2027
The government of President Luiz Inácio Lula da Silva (PT) is preparing a measure to eliminate, by 2030, the Income Tax rate that airlines pay in aircraft rental contracts (leasing). The financing modality is used by practically all Brazilian commercial aviation.
Today, when companies like Azul, Gol and Latam pay foreign companies to rent planes, they need to collect 3% on these amounts as Withholding Income Tax, at a special rate. This differentiation ends in January 2027. If nothing is done, the airline sector will start paying the standard rate of 15% applied to shipments abroad.
The proposal wants to maintain the 3% valid throughout 2027, with the promise of a gradual reduction of 1 percentage point each following year, until the charge reaches zero in 2030.
The measure is a priority in the airline rescue plan, and is being prepared by the Ministries of Ports and Airports and Finance, with the collaboration of the private sector.
The director of SAC (National Civil Aviation Secretariat), Daniel Longo, confirmed that the measure is under analysis and aims to build a “staircase in reverse” in collecting the tax. The Ministry of Finance also stated that the issue is under detailed evaluation by the technical team.
KEROSENE RISE
The objective of the exemption is to provide financial relief to a sector in debt and exposed to exchange rate variations and the rise in QAV (aviation kerosene). The government is trying to prevent the increase in taxes from causing a new increase in fares.
SAC estimates that applying the 15% rate would add R$452 million per year to airline costs, an amount that would end up being passed on to passengers.
The plan gained strength with the recent crisis in QAV, the main aviation input. According to the government itself, the price of fuel rose 9.4% in March, 54.8% in April and 18% in May. Over the period, the increase was close to 99%. The April and May adjustments alone added around R$1.84 billion to company expenses.
This cost pressure scenario has already resulted in concrete impacts on commercial operations. Between the months of February and March, domestic tickets rose 17.8%. At the same time, companies downsized their operations and more than 6,200 flights from the national schedule ceased to exist between May and June.
ENTRAVE FISCAL
The main obstacle to getting the new taxation rule off the ground is fiscal. As the current special rate was defined by law, the change requires approval by the National Congress.
Furthermore, the Fiscal Responsibility Law determines that the Executive presents a financial compensation measure to cover the loss of revenue to the public coffers. The government is considering presenting an amendment to a bill already in progress or forwarding an unprecedented proposal to parliamentarians.
OTHER TAXES
Aircraft rental is not the only area of tax concern in the sector. Airlines are also dealing with the impact of the increase in the IOF (Financial Operations Tax) on international operations, which is expected to add R$600 million annually to the sector’s expenses, as maintenance, insurance and parts contracts depend on the dollar.
There is also an effort by companies to avoid the incidence of future Selective Tax on more modern or low-emission technological planes.
