Lula administration considers zero-fare transport for potential fourth term

The proposal for zero-fare public transportation has been excluded from President Luiz Inácio Lula da Silva’s official government plan, though officials indicate the policy remains under consideration for a potential fourth term. Giancarlo Gama, an advisor at the Ministry of Cities' National Secretariat for Urban Mobility, stated during an ANPTrilhos event that while the measure is viewed “with affection,” it presents significant operational and fiscal complexities.

To address these challenges, the administration is exploring various financing mechanisms. These include the taxation of negative externalities from individual transport, the restructuring of the ‘vale-transporte’ (transportation vouchers), and the potential reallocation of resources from the Fuel Intervention in the Economic Domain (Cide) tax, as permitted by the new Urban Mobility Legal Framework. The goal is to establish permanent and progressive funding sources to reduce the financial burden on passengers and ensure fiscal neutrality.