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SÃO PAULO, Brazil (Reuters) – The Government of the State of São Paulo announced Tuesday the reduction of the Commodity Traffic and Services Tax (ICMS), which concerns the fuel of Aviation, from 25 to 12%, on domestic flights.
The measure takes effect from April.
In return, the airlines agreed to create an additional 490 weekly flights on 70 new routes within 180 days. New destinations to be announced after joint technical studies between government and business
According to the São Paulo government, the measure will result in a collection loss of about 205 million reais this year. However, the economic impact of the additional supply of flights, including the creation of 59,000 jobs, is at least 316 million reais.
Tax Reduction is an Old Industry Demand, According to Which Fuel Represents About
According to São Paulo Governor João Doria, the reduction of ICMS should also increase competition in the sector, by encouraging lower ticket prices.
"There is concrete expectation of a one-time cost reduction for certain destinations and at certain times."
As a result, the shares of the national airline listed on the São Paulo Stock Exchange extended the previous day's gains. At 15:07, the Gol stock rose by 2.08%, while that of Blue was 0.84%. At the same time, the Ibovespa dropped by 0.91%.
According to Mr. Abear, the action taken by the Government of São Paulo should increase the number of cities in the state served by air transport, from seven to thirteen, as airlines take over . the commitment to meet six new destinations within the state and create another 64 domestic flights.
"This will be the equivalent of 490 weekly departures that should be started within 180 days of being formalized by the National Agency for Civil Aviation (ANAC)," Abear said in a statement. communicated.
[Par Aluisio Alves] 19659012]
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