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Impacto da diferenciação do ICMS entre etanol hidratado e gasolina C para a economia do Estado de Minas Gerais
[Impact of the ICMS differentiation between hydrated ethanol and gasoline C for the economy of the State of Minas Gerais]

Author

Listed:
  • Cabral da Costa, Cinthia
  • Guilhoto, Joaquim José Martins

Abstract

The taxation policy of the Tax on Circulation of Goods and Services (ICMS) differentiated between fuel encourages ethanol consumption because of the lower rate charged on it in relation to that charged on gasoline C in some states of Brazil. The State of Sao Paulo has a lower tax rate for hydrous ethanol (12%) compared to gasoline C (25%). This study aimed to identify the impacts on the Brazilian economy resulting from a policy of differentiation between the fuel tax that benefits the ethanol consumption. For this, we analyzed the losses that could be generated by the increase in tax rate for ethanol in Sao Paulo. The methodology was used to analyze the input-output matrix, being the same for the year 2004 and specific to the State of Sao Paulo. The results indicated that the reduction in the rate of VAT for hydrous ethanol relative to gasoline, has economic benefits (increase in values of GDP, production and reduced imports) and social (increase in the amount of the fee and posts employment) for the Brazilian economy. We conclude that taxation policies may be essential for the development of some markets and that such development can generate economic and social gains. Sectors related to agribusiness, as the case of hydrated ethanol in this study indicate this fact.

Suggested Citation

  • Cabral da Costa, Cinthia & Guilhoto, Joaquim José Martins, 2010. "Impacto da diferenciação do ICMS entre etanol hidratado e gasolina C para a economia do Estado de Minas Gerais
    [Impact of the ICMS differentiation between hydrated ethanol and gasoline C for the ec
    ," MPRA Paper 42453, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:42453
    as

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    File URL: https://mpra.ub.uni-muenchen.de/42453/1/MPRA_paper_42453.pdf
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    References listed on IDEAS

    as
    1. Guilhoto, J. J. M. & Sesso Filho, U. A., 2005. "Estimação da Matriz Insumo-Produto a Partir De Dados Preliminares das Contas Nacionais
      [Estimation of input-output matrix using preliminary data from national accounts]
      ," MPRA Paper 38212, University Library of Munich, Germany.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    insumo-produto; etanol; gasolina; ICMS; Brasil;

    JEL classification:

    • D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods
    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models

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