Bolsonaro government wants Brazil aid at R$600 instead of R$400 and double gas vouchers

RIO DE JANEIRO, BRAZIL – The Planalto Palace has decided to increase the value of Brazil aid (survival assistance for the poorest) to R$ 600 (US$115) by the end of this year. In exchange, President Jair Bolsonaro’s (PL) government would give up compensating states that zero the state-level VAT rate (ICMS) on diesel and gas.

The measure to extend the aid by R$200 is expected to reach voters more quickly, something Jair Bolsonaro desperately needs for the October election. The ICMS compensation would depend on the governors and could be complicated by possible adjustments by Petrobras.

In practice, the monthly payment of R$600 counts for the 18.1 million families. The government argues that the war in Ukraine has forced the government to help the poorest, suffering from food and energy price inflation.

In line with this proposal, the Planalto Palace also decided to increase the frequency of the gas subsidy, known as “gas voucher,” and distribute a voucher to truck drivers instead of changing the state law through an interim measure.

The voucher for motorists can be up to R$1,000 to mitigate the impact of high fuel prices. The frequency should be increased for the kitchen gas assistance so that the value – which is paid bi-monthly – would be paid every month.

Another option would be to increase the value, paying twice the current amount, but maintaining payments every two months. More than 5 million families received a gas subsidy of R$53 in June 2022.

The cost of extending the truck subsidy is estimated at R$4 billion. Modifying the gas voucher will cost about R$1 billion for the same families that already receive this benefit.

The total cost of the new measures is expected to be between R$5 billion and R$6 billion, including the further voucher for truckers and the increased gas voucher.

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