BRASILIA – A Brazilian federal judge granted an injunction on Tuesday temporarily blocking an increase in fuel taxes announced last week by President Michel Temer’s government as a measure to trim the budget deficit.
Judge Renato Borelli ruled that while the government had the right to increase the levies, the Temer administration failed to respect the constitutional requirement for a 90-day interval between the executive order and its implementation.
Attorneys for the government said that they would appeal the injunction.
For the moment, however, the increase will be rolled back.
Prices rose by 10 percent following the imposition of the higher taxes, translating at the pump into an additional 0.41 reais (13 cents) per liter, or roughly 52 cents a gallon.
The Temer administration projects that the higher taxes will generate an additional 10.4 billion reais ($3.3 billion) in revenue by the end of the year.
The Sao Paulo State Federation of Industries (Fiesp), Brazil’s most influential employers’ group, expressed “outrage” last Friday over Temer’s decision to increase taxes on fuels, while other critics said the bump in fuel levies was likely to drive up prices of other goods by increasing the costs of transportation.
“Raising taxes will not solve the crisis, on the contrary, it will make things worse just when economic activity is showing signs of recovery,” Fiesp leader Paulo Skaf said.
Brazil’s gross domestic product has declined by more than 7 percent over the past two years.