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State-level fuel tax discussions should be postponed to next year

The winners of this year’s gubernatorial elections are expected to start their terms in 2023 facing empty coffers.

States’ financial difficulties are a product not only of the pandemic and the country’s recent sluggish growth, but also due to electoral measures approved by Congress and sanctioned by President Jair Bolsonaro that aimed to tame inflation – which has fallen but remains high.

Two pieces of legislation approved earlier this year aimed at reducing fuel prices nationwide by cutting state-level taxes on goods and services (ICMS).

The first, enacted in March, altered the way the tax is calculated, setting a

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