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A note on the relationship between fuel taxation and total ICMS revenue in the State of Ceará, Brazil

Author

Listed:
  • Benegas, Maurício
  • Raimir Holanda Filho

Abstract

This note examines the relationship between ad valorem taxes on gasoline and diesel and the total ICMS (Tax on the Circulation of Goods and Services) revenue in the state of Ceará, Brazil. Specifically, we ask: does an increase in the ICMS rate on gasoline and diesel lead to higher overall ICMS revenue in Ceará? To investigate this, we specify a quadratic relationship between total revenue and fuel prices. Our findings indicate the existence of an interval in which increasing fuelspecific ICMS rates boosts total tax revenue. However, beyond this interval, further increases may reduce overall revenue.

Suggested Citation

  • Benegas, Maurício & Raimir Holanda Filho, 2025. "A note on the relationship between fuel taxation and total ICMS revenue in the State of Ceará, Brazil," Revista Brasileira de Economia - RBE, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil), vol. 79(4), December.
    • Handle: RePEc:fgv:epgrbe:v:79:y:2025:i:4:a:93990
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