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Tax on aviation fuel may be cut by half in many Brazilian states

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Senate Bill PRS 55/2015, which proposes a maximum ICMS (state tax)of 12 percent for aviation fuel enters its voting phase. Nowadays, Sao Paulo and six other states apply a 25 percent tax on fuel. If approved, the ceiling level will enter into force on December 31st of this year.

Proponents of the 12 percent ceiling say that it will stimulate the development of the various regions of the country. As this measure reduces costs, it enables new frequencies, increasing the competitiveness and efficiency not only of airlines, but also of airports spread throughout Brazil .

The expectation is that more than 198 daily flights will be created and airfares will decrease in price after the measure comes into force.

Senators from states with a rate higher than 12%, especially Sao Paulo, will try to block its approval.