President Lula sanctions law to encourage the chemical industry

President Luiz Inácio Lula da Silva sanctioned this Thursday (19) the law that reduces tax rates for chemical and petrochemical industries. This applies to industries participating in the special tax regime until migration to a new regime effective in 2027.. The decision increases the budget allocated to the Special Chemical Industry Regime (Reiq) this year from R$1 billion to R$3.1 billion.

According to the text, the rates referring to the reduced payment of federal taxes (PIS and Cofins) will be valid from March to December this year and will take the place of others vetoed by Lula due to a lack of forecast budgetary impact.

A consensus was reached around the new project, and the law, already sanctioned, establishes a limit of R$2 billion for tax waivers in 2026, while at the same time exempting the proposal from the requirements of the Fiscal Responsibility Law and the Budgetary Guidelines Law. The legislation also provides for an additional R$1.1 billion for petrochemical plants and chemical industries that are part of the Special Chemical Industry Regime (Reiq).

For next year, the Special Chemical Industry Sustainability Program (Presiq) will come into force, the purpose of which is to reduce the sector’s production costs by reducing tax rates.

RECEPTION OF THE NEWS

The sanction was received by the mayor of Cubatão, César Nascimento (PSD) as a great achievement for Baixada Santista. In February, he was in Brasília and spoke with representatives of the Federal Government and the National Congress in search of incentives and measures to protect industries.

“Ensuring that our industries are well structured and protecting workers’ jobs is up to us and the Federal Government. And generating bread on the family table. Industry has always been the heart of Cubatão. As mayor, I have the duty to defend that they continue to operate, generating taxes that guarantee the provision of public services by the City Hall and the income of workers”, stated Nascimento.

Federal deputy Carlos Zarattini (PT-SP), author of the project sanctioned yesterday, also celebrated the news. According to him, the matter operates on three fronts: short-term tax relief, transition between Reiq and Presiq and signaling a medium-term industrial policy guided by sustainability and reduction of external vulnerabilities.

“This law is the result of an effort by the Executive and Legislative branches to protect the Brazilian industrial base and prepare the country for a policy of developing a competitive, sustainable chemical industry with greater productive autonomy.”

TRANSITION

For now, the law has a transitional nature, to avoid abrupt discontinuity of the special regime in force. Reiq’s tax benefits will end at the beginning of 2027, due to the end of contributions to PIS and Cofins, promoted by tax reform.

The fiscal impact will only be this year, and the estimated loss of R$3.1 billion will be offset by gains in revenue and projected revenue during the year 2026.