Brazil is preparing tax breaks that may channel more of the country’s sugar cane into ethanol production to meet additional demand, two people with knowledge of the plan said.
Proposed changes to the ethanol tax system include lower payments and the possibility of converting the amount paid into credit, said the people, who asked not to be named because the plan hasn’t been made public. Implementation of the changes is in the hands of President Dilma Rousseff for a final signature, one of the people said.
Producers of the biofuel pay taxes of 0.12 real (6 cents) a liter. Energy Minister Edison Lobao told reporters Feb. 4 that ethanol tax cuts were under consideration.
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