Brazil faces proposed cuts to tax incentives and energy programs

Renan Santos has proposed a plan to reduce federal public spending by R$ 250 billion, which includes reviewing tax incentives and benefits. As part of this initiative, Santos criticized the Manaus Free Trade Zone, suggesting it be one of the first sectors analyzed. He specifically targeted the motorcycle industry, claiming Honda receives R$ 16 billion in tax exemptions in the region, questioning the necessity of such high state spending for production in that specific location.

Separately, the Ministry of Mines and Energy has proposed a R$ 967.1 million reduction in the budget for the 'Luz para Todos' program for 2027. This 37.5% cut would reduce transfers from the Energy Development Account from R$ 2.57 billion to R$ 1.61 billion. The reduction is expected to slow the expansion of the electrical grid across 15 Brazilian states, with the most significant impacts felt in Amazonas, Acre, Pará, Maranhão, and Piauí.