Brazil’s government on Thursday effectively eliminated a heavy tax on the leased aircraft used by most Brazilian-flag carriers. The government set the tax on foreign exchange remittances to aircraft leasing companies at zero, effective through 2022. Previously, Brazil levied a tax of 25 percent on such remittances to companies located in countries designated as tax havens. In September, the government added Ireland to its tax haven list. Ireland is the main source of leased aircraft for Brazilian, and many other, airlines. Brazil’s government effectively dropped the tax after pressure from airlines, who said the 25 percent levy would result in sharp increases in fares. Fare hikes would come at a time of continued high inflation.
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