The government missed out on R$1 billion in tax revenue in 2009 due to tax evasion in the marketing of ethanol, according to a report released by the National Federation of Fuel and Lubricant Commerce (Fecombustíveis).
The Fecombustíveis Annual Report of Retail Fuel Sales shows that losses to government coffers were R$400 million from the (non)collection of the PIS / Confins tax and R$600 million from the Circulation of Goods and Services tax (ICMS).
Data from a consolidated survey by the federation in 2009 indicates that 30% of the ethanol sold in Brazil last year did not pay taxes.
The president of Fecombustíveis, Paulo Miranda Smith, sums up the problem as follows:”It is practically impossible for a gas stations that complies with the law to compete with gas stations that do not by evading taxes. As a result everybody does it. And everybody loses out in the end.”