Brazil's Chamber Approves Temporary Tax Cuts for Chemical and Petrochemical Industry

Overview

• Lawmakers set reduced PIS/Cofins rates at 1.52% and 7% from January 2025 to February 2026, then 0.62% and 2.83% from March to December 2026.
• The relief covers purchases and imports of key feedstocks such as naphtha, ethylene, propylene, natural gas and ammonia used by the sector.
• The approved text lifts the 2026 tax-expenditure ceiling to R$3.1 billion, combining R$1.1 billion in the federal budget with R$2.0 billion from revenue gains under a prior law.
• Article 4 waives certain requirements of the LDO and Fiscal Responsibility Law for fiscal-impact demonstration and monitoring, and the benefits end once the cap is reached.
• The package is presented as a bridge from Reiq to Presiq to avoid abrupt cost increases, and it was fast-tracked under an urgency vote of 298–132 as the Chamber also advanced urgency for a patent compulsory-licensing bill.