Brazil May Lack Room for More Tax Cuts on Energy, Mantega Says

Brazil may not be able to reduce federal taxes on electricity by enough to to reach its goal of lowering power bills by 20 percent next year, Finance Minister Guido Mantega said today.

President Dilma Rousseff’s government offered compensation for companies that cut prices now in exchange for renewing contracts set to expire through 2017. Cia Energetica de Sao Paulo, Cia Energetica de Minas Gerais, Cia Paranaense de Energia and Centrais Eletricas de Santa Catarina missed the deadline to sign concession renewals.

“We are still studying how to get to 20 percent,” Mantega told reporters today. “The government has a limit of tax reductions, but we will find a solution.”

Nelson Hubner, head of the electricity regulator, told reporters today that 20 percent is still the target and that any help in terms of lower state taxes “would be welcome.”

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