Utilities continue push for tax cuts on sanitation

- Monday, December 5, 2011

Utilities continue push for tax cuts on sanitation

Executives from 25 Brazilian state water utilities met in Paraná state capital Curitiba to continue their push for federal tax cuts for the country's water and sanitation sector.

The meeting addressed the proposed elimination of the PIS social integration tax and Cofins and Pasep income taxes, which represent some 2bn reais (US$1.12bn) in annual taxes for the companies, Paraná state water utility Sanepar said in a release.

"Sanitation is essentially to promote public health and to offer clean water and wastewater collection and treatment. It should not be taxed the same way as other activities," said Sanepar president Fernando Ghignone, who is also the VP of state sanitation companies association Aesbe.

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Introducing the cuts would allow more spending on socio-environmental education, according to the executive, who highlighted the fact that broadband internet providers are receiving tax breaks.

Water utilities also need to increase their investments in the sector, as the country needs to spend some 20bn reais each year to ensure universal water and sanitation coverage by 2025, Ghignone added.

Aesbe was in talks with federal authorities for two months earlier this year regarding its proposal for tax cuts. The government officially rejected the request in June.