In Brazil, the Brazilian Sugarcane Industry Association (UNICA) responded to allegations that a pre-existing VAT (value-added tax) on ethanol in the Brazilian state of São Paulo is equivalent to the return of Brazil’s tariff on imported ethanol, which was zeroed in 2010. The statement should be attributed to UNICA President and CEO, Marcos Jank.
“Recent media reports involving a value-added tax on ethanol in the state of São Paulo, known as ICMS (Goods and Services Tax), have included statements implying that this pre-existing tax is somehow equivalent to the reinstatement of Brazil’s federal import tariff on ethanol, which was zeroed by the government at UNICA’s request in 2010.
“UNICA would like to clarify that the ICMS is a country-wide tax applied to nearly all products, imported or domestically produced, that has been in place for several years. It is applied by state governments on all anhydrous ethanol.
“Contrary to what has been reported, the ICMS on imported ethanol has never been waived. Because Brazilian demand for imported anhydrous ethanol was significantly higher in 2011 than in previous years, the São Paulo state government deferred collection of the ICMS at the customs clearance point to speed up the import process. This measure was introduced with pre-determined start and end dates: October 1st, 2011, and May 31st, 2012, respectively.
“These changes in state government procedure do not introduce any new taxation on ethanol, and have no connection with Brazil’s 20% federal tariff on imported ethanol, which was zeroed in 2010 at UNICA’s request.”