Hey, I’m Douglas, Editor-in-Chief of the Brazilian Tax Reform Portal 🇧🇷.

The government of Luiz Inácio Lula da Silva (PT) launched a package of initiatives to ease fuel prices due to the volatility caused by the war between the United States and Iran (read more)

Tax waiver – PIS (Social Integration Program) and Cofins (Contribution for the Financing of Social Security) rates on diesel were reduced to zero;
Subsidy – A subsidy of R$ 0.32 per liter of diesel was created for producers and importers;
Exporters – The export tax rate on crude petroleum oils was increased to 12%. In addition, a 50% rate was established for diesel exports. The intention is to protect the domestic market.

In technical terms, the rate was not effectively reduced to zero. What occurred was a 99.9% reduction in the charge. In other words, the amount paid in federal taxes on diesel will be practically nil.

According to the government, the measures should reduce the fuel price by R$ 0.64. They will be temporary. The subsidy is set to expire on December 31, but it may end earlier. The zero PIS/Cofins rates will initially remain in place until May 31.

Diesel was chosen as a priority for the package because it is an important fuel in the Brazilian economy. For example, it is used by truck drivers for cargo transportation in Brazil.

TAX ON THE CIRCULATION OF GOODS AND SERVICES

On the same day the government announced the measures, Lula suggested that state governors reduce ICMS (Tax on the Circulation of Goods and Services) rates on diesel.

The state decided on Monday (March 30, 2026) whether or not to accept the proposal from Luiz Inácio Lula da Silva's (PT) government for a subsidy of R$ 1.20 per liter of imported diesel. Of this amount, R$ 0.60 would be covered by the governors supporting the plan and R$ 0.60 would come from the federal government.

This information was released on Friday (March 27) by the executive secretary of the Ministry of Finance, Rogério Ceron. It was expected that the governors would give an ultimatum on the matter this afternoon. The issue was discussed with Comsefaz (National Committee of Finance Secretaries) after a meeting of Confaz (National Council of Finance Policy).

Ceron stated that a "significant number" of states had adapted to the government's proposal, but did not specify which ones. However, others still had doubts and wanted more information. Thus, the deadline for a response was extended to next Monday. "I am very hopeful. From this, there has been significant adherence, and we agreed, we pacted among ourselves, not to get into the nuances of state A or B [that adhered to the package]," Ceron declared to journalists in São Paulo after this afternoon's meeting.

The subsidy is public financial support to reduce costs. It would be as if part of the price of imported diesel were paid so that the item would be cheaper for consumers. The measure is valid until May 31, 2026.

The objective of the economic intervention is to lower the price of fuel, which has suffered price fluctuations because of the war between the United States and Iran. In theory, the conflict makes fuel more expensive because it increases the price of oil on the world market.

The intervention led to the blockade and attacks in the Strait of Hormuz, a route through which a large part of the oil exported from the Middle East passes.

EXPORTS

The Federal Revenue Service updated the Export Manual with the changes introduced by the government measures, expanding the scope of the Export Tax.

Under the new rule, the tax will apply to crude petroleum oils, at a rate of 12%, and to diesel oil, at a rate of 50%. In addition, the tax calculation will be carried out automatically upon registration of the Single Export Declaration (DU-E), following integration with the Tax Treatment module.

According to the manual, the tax base will be the value of the goods at the place of shipment, using the exchange rate from the previous business day. Payment via DARF must be attached to the DU-E, and shipment will only be authorized after the tax has been settled.

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