The Brazilian Senate on Tuesday passed government-sponsored legislation to extend the life of import-tax exemptions for companies engaged in oil and gas development, but scaled back validity of the tax regime from the year 2040 to 2022. The bill has already passed the Chamber of Deputies. It will now be returned to the lower house for consideration in its amended form. The Chamber version included the government’s original provision for maintaining the favorable tax regime through 2040. The Senate adopted the amendment based on the argument that tax exemptions, under current budget laws, cannot remain in force for more than five years. The exemption regime, known as Repetro, allows companies engaged in exploration, development or production of oil and gas to enjoy exemptions from certain taxes involved in the import of equipment and raw materials. Proponents argue the tax exemption system is necessary to keep Brazil’s oil and gas industry competitive.
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