MercoPress, en Español

Montevideo, October 4th 2023 - 06:10 UTC



Brazil to the rescue of the sugar-ethanol industry with lower taxes and soft credit

Wednesday, April 24th 2013 - 05:49 UTC
Full article 10 comments

The Brazilian government has come to the rescue of the sugar-ethanol industry announcing that as of next May first the mandatory content of ethanol in gasoline will increase from 20% to 25%, taxes on the sugar-cane fuel will be eliminated and there will be soft loans to keep expansion going. Read full article


Disclaimer & comment rules
  • Anglotino

    Subsidising petrol?

    Way to go Brazil! Nothing screams 'don't innovate' like a subsidy.

    Apr 24th, 2013 - 08:20 am - Link - Report abuse 0
  • Brazilian

    # 1 - Subsidies for petrol? Obviously you didn't read the article. What is being implemented is a reduction of taxes to stimulate the ethanol industry.

    Apr 24th, 2013 - 02:24 pm - Link - Report abuse 0
  • ChrisR


    Please tell me WHO will pay for these subsidies:

    1) The Government

    2) The petrol industry

    3) The sugar cane industry

    4) The taxpayers

    5) Nobody.

    One answer only, please.

    Apr 24th, 2013 - 05:45 pm - Link - Report abuse 0
  • Brazilian

    # 3 - Tax reduction and subsidies are two different things. And to answer your question, the government will collect less taxes.

    Apr 25th, 2013 - 12:22 pm - Link - Report abuse 0
  • ChrisR


    From your answer I can see why you get somewhat confused.

    The real question (which I did not ask) is: where does the governments’ money come from. And the answer is TAXES ONLY.

    Governments cannot earn money, they can only spend it, and the people who provide it are the taxpayers. Just think about it: where do the subsidies come from - the exchequer. Fuel duty is a TAX, soft loans are low interest loans so they are losing the money that ALL the other people who have loans have to pay for in HIGHER interest (to net the same amount).

    Whichever way you look at it (with the exception of all government employees who DO NOT PAY TAX) everybody who pays tax has to fund ALL the government spending.

    Before you tell me the government workers pay tax just think about for a second.

    If you need me to explain I will be happy to do so.

    Apr 25th, 2013 - 03:28 pm - Link - Report abuse 0
  • Brazilian

    #5 - You still do not understand the difference between reducing taxes as an incentive, and giving subsidies to a certain sector from collected taxes. And to inform you, while taxes account for most of the money a government has, it is not the only way it makes money: public companies contribute with parts of their profits, as well as the government recieves interests on the money it loans. Government employees do pay taxes, at least here in Brazil, just so you know. And what is your point anyways? If they reduce taxes you complain, if they increase them you complain as well.

    Apr 25th, 2013 - 04:12 pm - Link - Report abuse 0
  • ChrisR

    6 Brazilian

    Government employees are stopped taxes YES! But where does the money come from to pay those people in the first place: the productive sector.

    Only companies and businesses (small and large) make actual money for the country, the government spend is from taxes that the ordinary citizen and these companies pay. NO government ANYWHERE in the world MAKES money, it is all tax driven or ‘profits from nationalised companies’, otherwise known as taxes.

    I can promise you this that a private company will ALWAYS be better run than ANY government owned monopoly. Or it would go out of business.

    I can only say that all private businesses in Uruguay (and I suspect it’s the same in Brasil) are taxed by the government in ways that would not be acceptable anywhere in the western world. How they manage to survive with all the fiscal drag they are paying for is a miracle to me.

    And as for: “You still do not understand the difference between reducing taxes as an incentive, and giving subsidies to a certain sector from collected taxes.” OH YES I DO and it is wasteful and skews the economy because other, productive people have to pay for it.

    Please imagine this: the government sets out each year what it can raise in taxes (from historical records) and what it wants to spend each year (which in good times is always more). To spend more it has to raise more money. Government monopolies are told to raise prices by 10% (say) and additional taxes are levied to make up the balance. Great (or not if you are a customer of the monopoly and have to pay more from your already taxed money, or you are caught in the new levy or both.

    Now the government suddenly find out that a nascent industry cannot compete because of the governments own actions (by raising prices that were suppressed for their own reasons) what do they do?

    Give a soft loan (from the government), give a tax break. Who pays for this? YOU do if you have a job outside of government or if you have your own b

    Apr 25th, 2013 - 06:54 pm - Link - Report abuse 0
  • Brazilian

    # 7 - What a long ass comment full of bullshit you just made. I AM A GOVERNMENT EMPLOYEE, AND I HAVE TO PAY TAXES LIKE EVERYONE ELSE. I pay income tax just like everyone else, when I go to the supermarket I pay taxes on what I buy just like everyone else, I pay the same amount of taxes that an employee of a private company plays. If you don't know what the hell you're talking about just shut the fuck up. As for the rest of your bullshit comment, like I said before, if the government increases taxes you'll complain, and if the reduce taxes you'll complain. You just want to go on ranting about anything, I got your point. Stop being a little bitch whining about the government and do something to change it if it bothers you so much. You sound like a little girl having a tantrum.

    Apr 26th, 2013 - 01:41 pm - Link - Report abuse 0
  • ChrisR

    8 Brazilian

    Well, I spend time trying to get you understand basic economics and you react like this.

    I am sorry to say I am not at all surprised to discover you are an employee of the government.

    If you cannot understand that although you are charged 'income tax' which is what I was on about YOU DO NOT PAY income tax. You do not EARN money from the real world like all the people who MAKE something and therefore MAKE money in order to pay tax. Your money comes from these people in terms of them paying EVERYTHING governments spend.

    Just one last chance and I will keep it simple. If there were NO private companies and private individuals, just government employees throughout the country WHERE WOULD THE MONEY THAT THE GOVERNMENT SPENDS COME FROM? Please do not witter on about loans of money the government has (who paid that), etc.

    And it shows that you do not understand me when you claim I say that “if the government increases taxes you'll complain, and if the reduce taxes you'll complain”. I make constructive comments hoping to get people like you to make a difference for the GOOD of Brasil. There is NO cohesive financial strategy in place, that much is obvious.

    But I am banging my head against a brick wall because you are incapable of understanding simple PUBLIC / PRIVATE sector relationships.

    No wonder the idiot Mantega is still finance minister if all that Dilma has to advise her other than him are people like you.

    Then you wonder why Yankeeboy says you are not even close to being in the big boys club. With individuals of poor intellect such as you have displayed on this Brasil will be playing in the sandbox with the rest of AR, Venezuela, Cuba, Ecuador, et al. There is no helping the likes of you I am afraid.

    Apr 26th, 2013 - 06:12 pm - Link - Report abuse 0
  • ljordao


    Brazilian is the kind of person I deal with every single day. You are spot on. With people like him Brazil will never go anywhere.

    Apr 29th, 2013 - 05:58 am - Link - Report abuse 0

Commenting for this story is now closed.
If you have a Facebook account, become a fan and comment on our Facebook Page!