May 7, 2020 / 11:38 PM / 22 days ago

Brazil's Bolsonaro rejects idea of gasoline tax to support ethanol industry

SAO PAULO/BRASILIA, May 7 (Reuters) - Brazilian President Jair Bolsonaro effectively ruled out raising gasoline taxes on Thursday, a blow to the ethanol industry which had asked for a gasoline tax hike to boost its own competitiveness amid the novel coronavirus pandemic.

Asked in Brasilia about a possible tax hike, Bolsonaro said that his policy “is to not raise taxes,” adding that it was a campaign promise. Various other industries are suffering due to the economic effects of the coronavirus, he said.

Ethanol suffered a 50% collapse in demand in April, according to government data, right as the sugarcane harvest in Brazil’s center-south region is starting.

Evandro Gussi, president of Brazilian sugarcane association Unica, said Bolsonaro’s statement “was not the response we were hoping for.”

“It’s extremely worrying. The sector is on the edge of collapse every day,” he said.

“We see, on the other hand, that the president hasn’t turned his back. This dialogue remains open in order to find a mechanism to minimize the damage.” (Reporting by Roberto Samora and Ricardo Brito; Writing by Gram Slattery; editing by Grant McCool)

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