A federal judge in Brasília on Tuesday blocked a government-ordered hike in fuel taxes, saying the increase was unconstitutional. The judge issued an injunction blocking the tax increase nationwide, saying a tax hike can only occur with the approval of Congress. Last week, Finance Minister Henrique Meirelles announced higher taxes on fuels, designed to bring the government a much-needed boost in revenues. The measure should bring R$10.4 billion in new tax revenues into government coffers by the end of the year. In attempting to avoid the injunction, the government argued that it was not actually raising the fuel tax but merely eliminating a series of discounts put in place in past years. Eliminating the discounts allowed the tax rate to float up to its original level, the government said. The government can appeal the injunction.
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