Repetro can reduce investments and jobs in Rio de Janeiro

If the Legislative Assembly of Rio de Janeiro (ALERJ) Approves the bill 3660/2017, by Mr André Ceciliano (PT), which restricts the scope of the Repetro, special customs regime for the oil and gas sector in the country, only at the exploratory stage, it may result in a strong reduction in investment and jobs. The alert was made on Tuesday by the Executive Secretary of the Brazilian Petroleum Institute (IBP), Antônio Guimarães, during the public hearing held at Alerj on the bill.

Under the special regime of the Repetro (Federal Law n ° 13.586/2017), federal tax exemption was granted to the oil and gas sector for the exploration and development phases of production. Last year, the Repetro law had its extended deadline up to 2040. In turn, all States adhered to the Repetro, fixing at 3% the incidence of ICMS in operations destined for both the exploration phase and the production development.

However, although the state of Rio has adhered to and regulated the rules, the law that probate in Alerj wants to limit the incidence of 3% of ICMS to the exploratory phase and to tax 20% of ICMS investments in the development phase, which , according to IBP, are the highest. The member's argument is that the state needs more tax revenue in view of the financial crisis.

According to the Executive Secretary of IBP, surveys realized that investments will be made in the order of US $130 billion in the coming years in the country, reaching an annual peak of investments of the order of US $9.5 billion after 2025. These investments will generate, according to the IBP, about 240,000 jobs. Of this total, the state of Rio, by having large number of projects on its coast, can generate about 130,000 jobs.

-If this bill is approved, even if some projects are maintained, even with the profitability below 10%, the state of Rio will lose in income and employment. This is because the companies will no longer acquire the equipment in Rio, where they'll focus on a 20% ICMS, to buy in the neighboring state, in which the tribute is only 3%-highlighted the executive.

The IBP executive pointed out that oil consumption tends to be reduced in the coming years, mainly in the transport sector, with the arrival of new technologies such as electric car or biofuels. Then, according to him, Brazil can not lose again the opportunity to exploit this wealth now for the benefit of society.

-If Brazil wants to transform oil reserves into value for society, generating jobs and income, we have to develop as quickly as possible. You cannot miss the opportunity-said Antônio Guimarães. Source: newspaper The globe

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